Question

From the followng information, prepare Cash Flow Statement for Dainik Jagran:
$\begin{array}{cccc}\text{Particulars}& \text{Note}& \text{31-03-2017}& \text{31-03-2017}\\ & \text{No.}& \text{(Rs)}& \text{(Rs)}\\ I.\text{Equity and Liabilities}& & & \\ \left(1\right)\text{Shareholder's Funds}& & & \\ \left(a\right)\text{Share Capital}& & 5,00,000& 7,00,000\\ \left(b\right)\text{Reserve and Surplus}& & 2,00,000& 3,50,000\\ \left(2\right)\text{None-currnt Liabilities}& & & \\ \text{Long term Borrowings}\left(12\%bankloan\right)& & 1,00,000& 50,000\\ \left(3\right)\text{Current Liabilities}& & & \\ \left(a\right)\text{Trade Payables}& & 50,000& 45,000\\ \left(b\right)\text{Other Current Liabilites (Outstanding rent)}& & 5,000& 7,000\\ \left(c\right)\text{Short Term Provisions}& 1& 80,000& 1,20,000\\ \text{Total}& & 9,35,000& 12,72,000\\ II.\text{Assets}& & & \\ \left(1\right)\text{Non-current Assets}& & & \\ \left(a\right)\text{Fixed Assets Tangible}& 2& 5,00,000& 5,00,000\\ \left(b\right)\text{Fixed Assets Intangible}& & 1,00,000& 95,000\\ \left(c\right)\text{Non-current Investments}& & \underset{–}{}& 1,00,000\\ \left(2\right)\text{Currnet Assets}& & & \\ \left(a\right)\text{Trade Receivables}& & 80,000& 1,20,000\\ \left(b\right)\text{Inventories}& & 50,000& 1,30,000\\ \left(c\right)\text{Cash and Cash Equivalents}& & 2,05,000& 3,27,000\\ \text{Total}& & 9,35,000& 12,72,000\end{array}$

Notes to Accounts :
$\begin{array}{ccc}\text{Particulars}& \text{31st March,2017}& \text{31st March,2018}\\ 1.\text{Short-term Provisions}& & \\ \text{Proposed Dividend}& 50,000& 70,000\\ \text{Provision for Taxation}& 30,000& 50,000\\ \text{Total}& 80,000& 1,20,000\\ 2\text{Fixed Assets Tangible}& & \\ \text{Furniture}& 3,00,000& 2,70,000\\ \text{Equipments}& 2,00,000& 2,30,000\\ ‘\text{Total}& 5,00,000& 5,00,000\end{array}$

During the year, equipment costing Rs 80,000 was purchased. Loss on sale of equipment amounted to Rs 5,000. Depreciation of Rs 15,000 and Rs 3,000 were provided for equipment and furniture respectively.

Answer 1

CASH FLOW STATEMENT
for the year ended 31st March,2018
$\begin{array}{ccc}\text{Particulars}& \text{Amount}& \text{Amount}\\ & \text{(Rs)}& \text{(Rs)}\\ A.\text{Cash Flow from Operating Activities}& & \\ \text{Profit before Tax (Note 1)}& 2,70,000& \\ \text{Adjustments related to non-cash and non-operating}& & \\ +\text{Depreciation (15,000 + 3,000)(Note 2)}& 18,000& \\ +\text{Loss on Sale of Equipment}& 5,000& \\ +\text{Interest on Bank Loan (12\%)on 1,00,000 assuming loan is repaid}& 12,000& \\ \text{at the end of the year)}& & \\ +\text{Intangible Assets written off}& 5,000& \\ \text{Operating Profit before working capital changes}& 3,10,000& \\ +\text{Interest in Outstanding Rent}& 2,100& \\ (-)\text{Decreases in Trade Payables}& (5,000)& \\ (-)\text{Increase in Trade Receivables}& (40,000)& \\ (-)\text{Increases in Inventory}& (80,000)& \\ \text{Cash Generated from Operating Activities}& 1,87,000& \\ (-)\text{Tax Paid (P.Y)}& (30,000)& \\ \text{Net Cash from Operating Activities (A)}& & 1,57,000\\ B.\text{Cash Flow from Investing Activities}& & \\ \text{Purchase of Equipment}& (80,000)& \\ \text{Purchase of Non-current Investments}& (1,00,000)& \\ \text{Sale of Equipment}& 30,000& \\ \text{Sale of Furniture}& 27,000& \\ \text{Net Cash used in Investing Activities (B)}& & (1,23,000)\\ C.\text{Cash Flow from Financing Activities}& & \\ \text{Repayment of Bank Loan}& (50,000)& \\ \text{Proceeds from Issue of Shares}& 2,00,000& \\ \text{Interest Paid on Bank Loan}& (12,000)& \\ \text{Dividend Paid (P.Y)}& (50,000)& \\ \text{Net Cash from Financing Activities (C)}& & 88,000\\ \text{Net increase in Cash Equivalents (A+B+C)}& & 1,22,000\\ +\text{Cash and Cash Equivalents at the beginning}& & 2,05,000\\ \text{Cash and Cash Equivalent at the end}& & 3,27,000\end{array}$

Working Notes :

$\begin{array}{cccc}1.& \text{Profit for the year (3,50,000 - 2,00,000)}& =& 1,50,000\\ & \text{+ Provision for Taxation (C.Y)}& =& 50,000\\ & \text{+ Proposed Dividend (C.Y.)}& =& \underset{–}{70,000}\\ & & =& \text{Rs}\underset{–}{2,70,000}\end{array}$

EQUIPMENT ACCOUNT
$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{To Balance b/d}& 2,00,000& \text{By Depreciation A/c}& 15,000\\ \text{To Bank A/c (Purchase)}& 80,000& \text{By Profit and Loss A/c (Loss on sale)}& 5,000\\ & & \text{By Bank A/c (sale)}& 30,000\\ & & \text{By Balance c/d}& 2,30,000\\ & 2,80,000& & 2,80,000\end{array}$

FURNITURE ACCOUNT
$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{To Balance b/d}& 3,00,000& \text{By Depreciation A/c}& 3,000\\ & & \text{By Bank A/c (sale)}& 27,000\\ & & \text{By Balance c/d}& 2,70,000\\ & 3,00,000& & 3,00,000\end{array}$