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Question

Prepare Cash Flow Statement from the following:

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019

Particulars ulars

Note No.

(₹)

I. Revenue from Operations (Net Sales)
36,00,000
II. Expenses;
Purchases of Stock-in-Trade
28,16,000
Change in Inventories of Stock-in-Trade
(65,000)
Finance Costs
15,000
Depreciation and Amortisation Expenses
80,000
Other Expenses
5,34,000
Total
33,80,000
III. Profit before Tax (I − II) 2,20,000
IV. Less: Provision for Tax
40,000
V. Profit after Tax (III − IV)
1,80,000
BALANCE SHEET
as at 31st March, 2019

Particulars ulars

Note No.
31st March, 2019
(₹)
31st March, 2018
(₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital
6,00,000 5,00,000
(b) Reserves and Surplus
1 3,00,000 1,20,000
2. Non-Current Liabilities
Long-term Loan
1,20,000 1,50,000
3. Current Liabilities
(a) Short-term Borrowings: Bank Overdraft
13,000 ...
(b) Trade Payables (Creditors)
2,85,000 2,38,000
(c) Short-term Provision: Provision form Tax
44,000 30,000
Total Total Expenses
13,62,000 10,38,000
II. ASSETS
1. Non-Current Assets
Fixed Assets
6,20,000 4,00,000
2. Current Assets
(a) Short-term Investments (Marketable Security)
34,000 20,000
(b) Inventories
3,28,000 2,63,000
(c) Trade Receivables
3,48,000 3,10,000
(d) Cash and Cash Equivalents
2 32,000 45,000
Total
13,62,000 10,38,000

Notes to Accounts

Particulars
31st March, 2019
(₹)
31st March, 2018
(₹)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss
3,00,000 1,20,000
2. Cash and Cash Equivalents
Cash in Hand
32,000 17,000
Cash at Bank
... 28,000
32,000 45,000

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Solution

Cash Flow Statement

for the year ended March 31, 2019

Particulars

Amount

(₹)

Amount

(₹)

A

Cash Flow from Operating Activities

Profit as per Statement of Profit and Loss

1,80,000

Provision for Taxation

40,000

Profit Before Taxation

2,20,000

Items to be Added:

Finance Cost

15,000

Depreciation and Amortisation Expenses

80,000

Operating Profit before Working Capital Adjustments

3,15,000

Less: Increase in Current Assets

Inventories

(65,000)

Trade Receivables

(38,000)

Add: Increase in Current Liabilities

Trade Payables

47,000

Cash Generated from Operations

2,59,000

Less: Tax Paid

(26,000)

Net Cash Flow from Operating Activities

2,33,000

B

Cash Flow from Investing Activities

Purchase of Fixed Assets

(3,00,000)

Net Cash Used in Investing Activities

(3,00,000)

C

Cash Flow from Financing Activities

Proceeds from Issue of Share Capital

1,00,000

Bank Overdraft 13,000

Redemption of Long-Term Loan

(30,000)

Interest (Finance Cost)

(15,000)

Net Cash Flow from Financing Activities

68,000

D

Net Increase or Decrease in Cash and Cash Equivalents

1,000

Add: Cash and Cash Equivalent in the beginning of the period (17,000 + 28,000 + 20,000)

65,000

Cash and Cash Equivalents at the end of the period (32,000 + 34,000)

66,000

Working Notes:

WN1

Provision for Taxation Account

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Bank A/c (Tax Paid- Bal. Fig.)

26,000

Balance b/d

30,000

Balance c/d

44,000

Profit and Loss A/c

40,000

70,000

70,000

WN2

Fixed Assets Account

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

4,00,000

Depreciation A/c

80,000

Bank A/c (Purchases- Bal. Fig.)

3,00,000

Balance c/d

6,20,000

7,00,000

7,00,000

Note: Short-term Investments are considered as a part of Cash and Cash Equivalents


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Q.

From the following Balance Sheet as at 31st March, 2019 and Statement of Profit and Loss for the year ended 31st March, 2019 of RSB Ltd. and additional information, prepare Cash Flow Statement:

Particulars

Note No.

31st March, 2019

(₹)

31st March, 2018

(₹)

I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital

7,50,000

5,00,000

(b) Reserves and Surplus

1

9,50,000

3,00,000

2. Non-Current Liabilities
Long-term Borrowings (5% Debentures)

7,00,000

4,00,000

3. Current Liabilities
(a) Trade Payables

1,10,000

90,000

(b) Other Current Liabilities

2

39,000

25,000

(c) Short-term Provisions (Provision for Tax)

2,60,000

2,25,000

Total

28,09,000

15,40,000

II. ASSETS
1. Non-Current Assets
(a) Fixed Assets – Tangible

3

6,85,000

7,45,000

(b) Non-current Investments

7,50,000

2,50,000

2. Current Assets
(a) Current Investments

6,74,000

95,000

(b) Inventories

1,00,000

2,00,000

(c) Trade Receivables

4,00,000

1,50,000

(d) Cash and Cash Equivalents

2,00,000

1,00,000

Total

28,09,000

15,40,000

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019

Particulars

Note No.

31st March, 2019

(₹)

31st March, 2018

(₹)

I. Revenue from Operations

4

40,00,000

35,00,000

II. Other Income

5

35,000

30,000

III. Total Revenue (I + II)

40,35,000

35,30,000

IV. Expenses:
Purchases of Stock-in-Trade

27,00,000

24,70,000

Change in Inventories of Stock-in-Trade

6

1,00,000

50,000

Finance Cost

27,500

20,000

Depreciation

40,000

45,000

Other Expenses

22,500

20,000

Total Expenses

28,90,000

26,05,000

V. Profit before Tax (III – IV)

11,45,000

9,25,000

VI. Less: Tax

3,45,000

2,25,000

VII. Profit after Tax (V – VI)

8,00,000

7,00,000

Notes to Accounts

Particular

31st March 2019

(₹)

31st March 2018

(₹)

1.

Reserves and Surplus
Debenture Redemption Reserve

1,00,000

1,00,000

Surplus, i.e., Balance in Statement of Profit and Loss

8,50,000

2,00,000

9,50,000

3,00,000

2.

Other Current Liabilities
Interest on Debentures

35,000

20,000

Outstanding Expenses

4,000

5,000

39,000

25,000

3.

Fixed Assets–Tangible
Cost

8,90,000

9,90,000

Less: Accumulated Depreciation

2,05,000

2,45,000

6,85,000

7,45,000

4.

Revenue from Operations
Sales

42,00,000

35,75,000

Less: Sales Return

2,00,000

75,000

40,00,000

35,00,000

5.

Other Income
Interest on Deposits

15,000

12,500

Dividend on Investments

10,000

17,500

Gain (Profit) on Sale of Fixed Assets

10,000

35,000

30,000

6.

Change in Inventories of Stock-in-Trade
Opening Stock

2,00,000

2,50,000

Less: Closing Stock

1,00,000

2,00,000

1,00,000

50,000

Additional Information:

Q.

From the following Balance Sheet of Samta Ltd., as at 31st March, 2019, prepare Cash Flow Statement:

Particulars ulars

Note No.
31st March, 2019
(₹)
31st March,
2018
(₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital
1 7,50,000 7,50,000
(b) Reserves and Surplus
2 3,10,000 (20,000)
2. Non-Current Liabilities
Long-term Borrowings (8% Debentures)
2,60,000 1,50,000
3. Current Liabilities
(a) Short-term Borrowings (8% Bank Loan)
40,000 50,000
(b) Trade Payables
1,20,000 1,10,000
(c) Short-term Provisions
3 50,000 40,000
Total Total Expenses
15,30,000 10,80,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets (Net)
8,60,000
6,20,000
(ii) Intangible Assets (Goodwill)
15,000 40,000
(b) Non-Current Investments
1,25,000 80,000
2. Current Assets
(a) Current Investments
5,000 15,000
(b) Inventories
1,95,000 1,00,000
(c) Trade Receivables
2,00,000 2,00,000
(d) Cash and Cash Equivalents
1,30,000 25,000
Total
15,30,000 10,80,000

Notes to Accounts

Particulars

31st March, 2019

(₹)

31st March, 2018

(₹)

1. Share Capital
Equity Share Capital

5,50,000

4,50,000

12% Preference Share Capital

2,00,000

3,00,000

7,50,000

7,50,000

2. Reserves and Surplus
Securities Premium Reserve

10,000

...

General Reserve

1,50,000

1,20,000

Surplus, i.e., Balance in Statement of Profit and Loss

1,50,000

(1,40,000)

3,10,000

(20,000)

4. Short-term Provisions
Provision for Tax

50,000

40,000

Additional Information :
(i) During the year a piece of machinery costing ₹ 60,000 on which depreciation charged was ₹ 20,000 was sold at 50% of its book value. Depreciation provided on tangible Assets ₹ 60,000;
(ii) Income tax ₹ 45,000 was provided;
(iii) Additional Debentures were issued at par on 1st October, 2018 and Bank Loan was repaid on the same date;
(iv) At the end of the year Preference Shares were redeemed at a premium of 5%.
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