Question

From the following information, prepare cash flow statement for Yogeta Ltd.
Balance Sheet
$$\begin{array}{cccccc}\text{Capital and Liabilites}& \text{2010 (Rs.)}& \text{2011 (Rs.)}& \text{Assets}& \text{2010 (Rs)}& \text{2011 (Rs)}\\ \text{Equity Share Capital}& 2,00,000& 3,00,000& \text{Bank}& 45,000& -\\ \text{Preference Share Capital}& -& 1,00,000& \text{Cash}& 5,000& -\\ \text{Profit and Loss Account}& 1,00,000& 2,00,000& \text{Stock}& 1,00,000& 1,70,000\\ \text{Loan}& 2,00,000& -& \text{Bills Receivable}& 50,000& 1,00,000\\ \text{Provision for Taxation}& 30,000& 50,000& \text{Fixed Assets}& 4,00,000& 7,00,000\\ \text{Bills Payable}& 50,000& 70,000& & & \\ \text{Bank Overdraft}& -& 1,00,000& & & \\ \text{Loan from Rahul}& \underset{–}{20,000}& \underset{–}{1,50,000}& & & \\ & \underset{–}{6,00,000}& \underset{–}{9,70,000}& & \overline{\underset{–}{6,00,000}}& \overline{\underset{–}{9,70,000}}\\ & & & & & \end{array}$$

Additional Information:
Net profit for the year after charging Rs. 50,000 as depreciation was Rs. 1,50,000, dividend paid on share was Rs. 50,000, tax provision created during the year amounted to Rs. 60,000.

Answer 1

Cash Flow Statement of Yogeta Ltd.
$$\begin{array}{cccc}& \text{Particulars}& \text{Amt. (Rs.)}& \text{Amt. (Rs.)}\\ \text{A.}& \text{Cash Flow from Operating Activities}& & \\ & \text{Profit as per Balance Sheet (2,00,000 - 1,00,000)}& 1,00,000& \\ & \text{Proposed Dividend}& 50,000& \\ & \text{Provision for Taxation}& \underset{–}{60,000}& \\ & \text{Net Profit before Taxation and Extraordinary items}& & 2,10,000\\ & \text{Adjustment for non-cash item:}& & \\ & \text{Depreciation}& & \underset{–}{50,000}\\ & \text{Operating Profit before Working Capital Changes}& & 2,60,000\\ & \text{Changes in Working Capital:}& & \\ & (+)\text{Increase in Bills Payable}& 20,000& \\ & (-)\text{Increase in Stock}& (70,000)& \\ & (-)\text{Increase in Bills Receivable}& \underset{–}{(50,000)}& \underset{–}{(1,00,000)}\\ & \text{Cash Generated from Operating Activities}& & 1,60,000\\ & (-)\text{Income Tax Paid (W.Note 1)}& & \underset{–}{(40,000)}\\ & \text{Net Cash from Operations}& & \underset{–}{1,20,000}\\ \text{B.}& \text{Cash Flow from Investing Activities:}& & \\ & \text{Purchase of Fixed Assets (W.Note 2)}& & \underset{–}{(3,50,000)}\\ & \text{Net Cash used in Investing Activities}& & \underset{–}{(3,50,000)}\\ \text{C.}& \text{Cash Flow from Investing Activities}& & \\ & \text{Issue of Equity Shares}& 1,00,000& \\ & \text{Issue of Preference Shares}& 1,00,000& \\ & \text{Loan from Rahul}& 1,30,000& \\ & (-)\text{Repayment of Loan}& (2,00,000)& \\ & (-)\text{Dividend Paid}& \underset{–}{(50,000)}& \\ & \text{Net Cash from Financing Activities}& & \underset{–}{80,000}\\ \text{D.}& \text{Net Decrease in Cash and Cash Equivalents (A + B + C)}& & (1,50,000)\\ & (+)\text{Cash and Cash Equivalents in the Beginning}& & \underset{–}{50,000}\\ \text{E.}& \text{Cash and Cash Equivalents at the End (Bank Overdraft)}& & \underset{–}{(1,00,000)}\\ & & & \end{array}$$

Working Notes:
(1)
Dr. Provision for Taxation Account Cr.
$$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}& \text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}\\ & \text{Bank A/c}& & & & \text{Balance b/d}& & 30,000\\ & \text{(Balancing Figure)}& & 40,000& & & & \\ & \text{Balance c/d}& & 50,000& & \text{Profit and Loss A/c}& & 60,000\\ & & & \overline{\underset{–}{90,000}}& & & & \overline{\underset{–}{90,000}}\end{array}$$


(2)
Dr. Fixed Assets Account Cr.
$$\begin{array}{cccccccc}\text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}& \text{Date}& \text{Particulars}& \text{J.F.}& \text{Amt. (Rs.)}\\ & \text{Balance b/d}& & 4,00,000& & \text{Depreciation A/c}& & 50,000\\ & \text{Bank A/c}& & 3,50,000& & \text{Balance c/d}& & 7,00,000\\ & & & \overline{\underset{–}{7,50,000}}& & & & \overline{\underset{–}{7,50,000}}\end{array}$$