Question

From the following Balance Sheet of Computer India Ltd., prepare cash flow statement.

(Rs in '000)

Particulars	Note No.	31st March 2017 (Rs)	31st March 2016 (Rs)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital		50,000	40,000
b) Reserves and surplus-Surplus	1	3,700	3,000
2. Non-Current Liabilities
10% Debentures		6,500	6,000
3. Current Liabilities
a) Short-term borrowings	2	6,800	12,500
b) Trade payables		11,000	12,000
c) Short-term provisions	3	10,000	8,000
Total		88,000	81,500
II) Assets
1. Non-current assets
a) Fixed assets	4	25,000	30,000
2. Current assets
a) Inventories		35,000	30,000
b) Trade receivables		24,000	20,000
c) Cash and cash equivalents-cash		3,500	1,200
d) Other current assets-prepaid exp.		500	300
Total		88,000	81,500

Notes to Accounts

	Particulars	31st March 2017 (Rs)	31st March 2016 (Rs)
1.	Reserve and surplus
	(i) Balance in statement of profit and loss	1,200	1,000
	(ii) General reserve	2,500	2,000
		3,700	3,000
2.	Short-term borrowings
	Bank Overdraft	6,800	12,500
3.	Short-term provisions
	(i) Provision for taxation	4,200	3,000
	(ii) Proposed dividend	5,800	5,000
		10,000	8,000
4.	Fixed Assets:
	Fixed Assets	40,000	41,000
	Less: Accumulated Depreciation	(15,000)	(11,000)
		25,000	30,000

Additional Information:

Interest paid on Debenture Rs. 600

Answer 1

Cash Flow Statement of Computer India Ltd.
				('00,000)
	Particulars			Amount Rs	Amount Rs
A.	Cash Flow from Operating Activities
	Profit as per Balance Sheet (1,200 – 1,000)			200
	Proposed Dividend			5,800
	General Reserve			500
	Provision for Taxation			4,200
	Net Profit before Tax and Extraordinary items				10,700
	Items to be added
		Provision for Depreciation		4,000
		Interest paid on Debentures		600	4,600
	Operating Profit before Working Capital changes				15,300
	Adjustments
		Less:	Increase in Current Assets
			Trade Receivables	(4,000)
			Inventories	(5,000)
			Prepaid Expenses	(200)	(9,200)
					6,100
		Less:	Decrease in Current Liabilities
			Trade Creditors	(1,000)	(1,000)
	Cash generated from Operating Activities				5,100
		Less:	Income Tax Paid		(3,000)
	Net Cash from Operation				2,100
B.	Cash Flow from Investing Activities
		Sale of Fixed Assets			1,000
	Net Cash from Investing Activities				1,000
C.	Cash Flow from Financing Activities
		Issue of Equity Shares			10,000
		Issue of 10% Debentures			500
		Less:	Dividend paid		(5,000)
		Less:	Interest paid		(600)
	Net Cash from Financing Activities				4,900
D.	Net Increase in Cash and Cash Equivalent (A+B+C)				8,000
		Add:	Cash and Cash Equivalent in the beginning
			Cash	1,200
			Bank overdraft	(12,500)	(11,300)
E.	Cash and Cash Equivalents at the end
			Cash	3,500
			Bank overdraft	(6,800)	(3,300)