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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 $$1^{st}$$ September, 2017.


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


Accountancy

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