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Question

From the following Balance Sheet of Kiero Ltd. and the additional information as on 31-3-2018. prepare a Cash Flow Statement:
Kiero Ltd.
Balance Sheet as at 31-3-2018
ParticularsNote
No.
31-3-18
(Rs.)
31-3-17
(Rs.)
I. Equity and Liabilities
(1) Shareholders Funds
(a) Share Capital
(b) Reserves and Surplus
(2) Non - Current Liabilities
Long term Borrowings
(3) Current Liabilities
(a) Short term borrowings
(b) Short term Provisions

1
2
3
4

7,90,000
4,60,000
5,00,000
1,15,000
1,18,000

5,80,000
1,20,000
3,00,000
42,000
46,000
Total
19,83,00010,88,000
II. Assets
(1) Non-Current Assets
Fixed Assets
(i) Tangible Aseets
(ii) Intangible Assets
(2) Current Assets
(a) Current Investments
(b) Trade Recivables
(c) Cash and Cash Equivalents
5
6

9,80,000
2,68,000
1,40,000
4,40,000
1,55,000

6,35,000
1,70,000
70,000
1,50,000
63,000
Total19,83,00010,88,000

Notes to Accounts:
Note
No.
Particulars31-3-18
(Rs.)
31-3-17
(Rs.)
1.Reserve and Surplus
Surplus (Balance in statement of Profit & Loss)
General Reserve

3,20,000
1,40,000

60,000
60,000
4,60,000 1,20,000
2.Long-term Borrowing
12% Debentures

5,00,000

3,00,000
5,00,000 3,00,000
3.Short-term Borrowing
Bank Overdraft

1,15,000

42,000
1,15,000 42,000
4.Short-term Provisions
Provision for Tax

1,18,000

46,000
1,18,000 46,000
5.Tangible Assets
Plat and Machinery
Less: Accumulated Depreciation

11,00,000
(1,20,000)

7,50,000
(1,15,000)
9,80,000 6,35,000
6.Intangible Assets
Goodwill

2,68,000

1,70,000
2,68,000 1,70,000
Additional Information:
12% debentures were issued in 1st September, 2017.

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Solution

Cash Flow Statement

Particulars

Amount (Rs.)

Amount (Rs.)

A. Cash Flow from Operating Activities

Surplus as on 31st March 2018

3,20,000

Less: Surplus as on 31st March 2017

(60,000)

2,60,000

Add: Transfer to General Reserve

80,000

Provision for tax created during the year

1,18,000

Profit before tax and extraordinary items

4,58,000

Add: Interest on 12% debentures

50,000

Depreciation for the year

5,000

55,000

Operating Profit Before Working Capital Changes

5,13,000

Less: Increase in the value of trade receivables

(2,90,000)

Cash generated from operations

2,23,000

Less: Tax paid

46,000

Cash Flow from Operating Activities

1,77,000

A. Cash Flow from Investing Activities

Purchase of plant and machinery

(3,50,000)

Purchase of goodwill

(98,000)

Cash used in Investing Activities

(4,88,000)

B. Cash Flow from Financing
Activities

Increase in Bank Overdraft

73,000

Proceeds from issue of 12% Debentures

2,00,000

Proceeds from issue of shares

2,10,000

Interest on 12% debentures

(50,000)

Cash Flow from Financing Activities

4,33,000

C. Net Increase/Decrease in Cash & Cash Equivalents

1,62,000

Add: Cash and Cash Equivalents as on 31st March 2017

Cash and Bank balance

70,000

Current investments

63,000

1,33,000

D. Cash and Cash Equivalents as on 31st March 2018

Cash and Bank balance

1,55,000

Current investments

1,40,000

2,95,000


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