Question

From the following Balance Sheet of JY Ltd. as at 31st March 2017, prepare a Cash Flow Statement: Balance Sheet of JY Ltd. as at 31.03.2017

	Particulars	Note No.	31.3.2017 Rs.	31.3.2016 Rs.
I-	Equity and Liabilities:-
1.	Share holder's Funds:
	(a) Share Capital		5,00,000	5,00,000
	(b) Reserve and Surplus	1	1,00,000	(25,000)
2.	Non-Current Liabilities:
	Long-term Borrowings	2	2,50,000	1,50,000
3.	Current Liabilities:
	(a) Short-term Borrowings	3	1,50,000	1,00,000
	(b) Short-term Provisions	4	2,00,000	1,25,000
	Total		$\overline{\underset{–}{12,00,000}}$	$\overline{\underset{–}{2,15,000}}$
II-	Assets:-
1.	Non-Current Assets:
	(a) Fixed Assets:
	(i) Tangible	5	6,00,000	4,50,000
2.	Current Assets:
	(a) Trade Receivables		2,75,000	2,25,000
	(b) Cash and Cash Equivalents		1,25,000	75,000
	(c) Short-term Loans and Advances		2,00,000	1,00,000
	Total		$\underset{–}{\overline{12,00,000}}$	$\underset{–}{\overline{8,50,000}}$

Notes to Accounts:

Notes No.	Particulars	31.3.2017	31.3.2017
1.	Reserves and Surplus: (Surplus, i.e., Balance in the Statement of Profit and Loss)	1,00,000 $\underset{–}{\overline{1,00,000}}$	(25,000) $\underset{–}{\overline{(25,000)}}$
2.	Long-term Borrowings: $10\%$ Debentures	2,50,000 $\underset{–}{\overline{2,50,000}}$	1,50,000 $\underset{–}{\overline{1,50,000}}$
3.	Short-term Brrowings: Bank Overdraft	1,50,000 $\underset{–}{\overline{1,50,000}}$	1,00,000 $\underset{–}{\overline{1,00,000}}$
4.	Short-term Provoisions: (i) Proposed Dividend (ii) Provision for Tax	75,000 1,25,000 $\underset{–}{\overline{2,00,000}}$	50,000 75,000 $\underset{–}{\overline{1,25,000}}$
5.	Tangible assets: Machinery Accumulated Depreciation	7,37,500 (1,37,500) $\underset{–}{\overline{6,00,000}}$	5,25,000 (75,000) $\underset{–}{\overline{4,50,000}}$

Additional Information: $Rs.1,00,000$ worth, $10\%$ debentures were issued on $\mathrm{31.3.2017}$

Answer 1

JY Ltd.

Cash Flow Statement for the year ended 31.3.2017

Particulars		Details	Amount
Net profit during year		1,25,000
Add: Provision for tax	1,25,000
Proposed dividend	75,000	2,00,000
Net profit before tax and extra-ordinary items		3,25,000
Adjustment of non-operating and non-cash items:
Add: Accumulated depreciation	62,500
Interest on debenture (WN-1)	15,000	77,500
Operating profit before working capital changes		4,02,500
Add: Increase in current liabilities and decrease in current assets
Less: Decrease in CL and increase in CA
Trade receivables		-50,000
Short term loans and advances		-1,00,000
Cash generated from operation		2,52,500
Less: Income tax		-75,000
A: Cash flow from operating activities			1,77,500
Machinery purchased		-2,12,500
B: Cash used in investing activities			-2,12,500
Proceeds from issue of debenture		1,00,000
Proposed dividend		-,50,000
Interest on debenture		-15,000
Issue of bank loan		50,000
C: Cash flow from financing activities			85,000
Net increase in cash and cash equivalents (A+B+C)			50,000
Add: Opening cash and cash equivalents			75,000
Closing cash and cash equivalents			1,25,000

Working note:

(a) Interest on debenture = 1,50,000 X 10 = Rs. 15,000

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