Advertisements
Advertisements
प्रश्न
Read the following hypothetical text and answer the given questions on the basis of the same:
Aashna, an alumnus of CBSE School, initiated her start up Smartpay, in 2015. Smartpay is a service platform that processes payments via UPI and POS, and provides credit or loans to their clients. During the year 2021-22, Smartpay issued bonus shares in the ratio of 5:1 by capitalising reserves. The profits of Smartpay in the year 2021-22 after all appropriations was ₹ 7,50,000. This profit was arrived after taking into consideration the following items -
| Particulars | Amount (₹) |
| Interim Dividend paid during the year | 90,000 |
| Depreciation on Machinery | 40,000 |
| Loss of Machinery due to fire | 20,000 |
| Insurance claim received for Loss of Machinery due to Fire |
10,000 |
| Interest on Non-Current Investments received | 30,000 |
| Tax Refund | 20,000 |
Additional Information:
| Particulars | 31.3.22 (₹) | 31.3.21 (₹) |
| Equity Share Capital | 12,00,000 | 10,00,000 |
| Securities Premium Account | 3,00,000 | 5,00,000 |
| General Reserve | 1,50,000 | 1,50,000 |
| Investment in Marketable Securities | 1,50,000 | 1,00,000 |
| Cash in hand | 2,00,000 | 3,00,000 |
| Machinery | 3,00,000 | 2,00,000 |
| 10% Non-Current Investments | 4,00,000 | 3,00,000 |
| Bank Overdraft | 2,50,000 | 2,00,000 |
| Goodwill | 30,000 | 80,000 |
| Provision for Tax | 80,000 | 60,000 |
- Goodwill purchased during the year was ₹ 20,000.
- Proposed Dividend for the year ended March 31, 2021 was ₹ 1,60,000 and for the year ended March 31, 2022 was ₹ 2,00,000.
You are required to:
- Calculate Net Profit before tax and extraordinary items.
- Calculate Operating profit before working capital changes.
- Calculate Cash flow from Investing activities.
- Calculate Cash flow from Financing activities.
- Calculate closing cash and cash equivalents.
उत्तर
(1) Net Profit before tax and extraordinary items = Net Profit for the year + Interim Dividend + Loss of assets due to fire + Provision for Tax + Proposed Dividend - Insurance claim received for Loss due to Fire – Tax refund
= 7,50,000 + 90,000 + 20,000 + 80,000 + 1,60,000 – 10,000 – 20,000
= ₹ 10,70,000
(2) Operating profit before working capital changes = Net Profit before tax and extraordinary items + Adjustments for non-cash and non-operating expenses and goodwill amortised – Adjustments for non-cash and non-operating incomes
= 10,70,000 + 40,000 + 70,000** – 30,000
= 11,50,000
** Goodwill amortised = Opening goodwill + Goodwill purchased - Closing goodwill
(3) Cash flow from Investing Activities = Interest on Non-Current Investments + Insurance claim for loss of assets due to fire – Purchase of Investments – Purchase of Machinery – Goodwill purchased
= 30,000 + 10,000 – 1,00,000 - 1,60,000 – 20,000
= ₹ (2,40,000) Outflow
(4) Cash flow from Financing Activities = Raise of Bank overdraft – Interim Dividend Paid – Final Dividend paid
= 50,000 – 90,000 – 1,60,000
= ₹ (2,00,000) Outflow
(5) Closing Cash and Cash Equivalents = Cash in Hand + Investment in Marketable Securities
= 2,00,000 + 1,50,000
= 3,50,000
APPEARS IN
संबंधित प्रश्न
Short Answer Question
How are the various activities classified (as per AS-3 revised) while preparing cash flow statement?
Long Answer Question
Explain the major Cash Inflow and outflows from investing activities.
For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow, viz., operating, investing and financing.
(a) Acquired machinery for Rs 2,50,000 paying 20% by cheque and executing a bond for the balance payable.
(b) Paid Rs 2,50,000 to acquire shares in Informa Tech. and received a dividend of Rs 50,000 after acquisition.
(c) Sold machinery of original cost Rs 2,00,000 with an accumulated depreciation of Rs 1,60,000 for Rs 60,000.
Identify the transactions as belonging to (i) Operating Activities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash and Cash Equivalents:
| (a) Cash Sale of Goods | (b) Cash Received against Revenue from Services rendered |
| (c) Cash Purchase of Goods | (d) Cash Paid against Services Taken |
| (e) Patents Purchased | (f) Marketable Securities |
| (g) Bank Overdraft | (h) Proceeds from Issue of Debentures |
| (i) Purchase of Shares | (j) Repayment of Long-term Loan |
| (k) Commission Received | (l) Redemption of Debentures |
| (m) Interest on Debentures | (n) Interest on Investments |
| (o) Income Tax Paid | (p) Income Tax Paid on Gain of Sale of Asset |
| (q) Cash Received from Debtors | (r) Cash Paid to Creditors |
Answer the following question:
From the following information, calculate the amount of cash flow from investing activities.
Acquired machinery for 10,00,000, paying 10% immediately in cash and accepting a draft for the balance in favour of the vendor, payable after three months.
What is meant by 'Operating Activities'?
Insurance Claim received by Albert Co. Ltd. of ₹ 5,00,000 for Loss of Machinery due to theft will be recorded in Cash Flow Statement in which of the following manner?
A company issued 20,000; 9% Debentures of ₹ 100 each at 10% Discount. These debentures were to be redeemed at 15% Premium at the end of 5 years. The balance in Securities Premium Account as of the date of Issue was ₹ 3,70,000. How this transaction will be reflected in Cash Flow Statement?
Calculate 'Cash Flows from Investing Activities' and 'Cash Flows from Financing Activities' for the year ended 31st March 2021 from the following Balance Sheet of Kamna Ltd. as 31st March 2021 showing your workings clearly:
| Kamna Ltd. Balance Sheet as at 31st March, 2021 |
|||
| Particulars | Note No. | 31st March, 2021 (₹) |
31st March, 2020 (₹) |
| I. Equity and Liabilities | |||
| 1. Shareholders' Funds | |||
| (a) Share Capital | 12,00,000 | 11,00,000 | |
| (b) Reserves and surplus | 1 | 3,00,000 | 2,00,000 |
| 2. Non-Current Liabilities | |||
| Long-term borrowings | 2,40,000 | 1,70,000 | |
| 3. Current Liabilities | |||
| Trade payables | 2,20,000 | 2,81,000 | |
| Total | 19,60,000 | 17,51,000 | |
| II. Assets | |||
| 1. Non Current Assets | |||
| (a) Fixed Assets | |||
| (i) Tangible Assets | 2 | 10,70,000 | 8,50,000 |
| (ii) Intangible Assets | 3 | 40,000 | 1,12,000 |
| 2. Current Assets | |||
| (a) Current Investments | 2,40,000 | 1,50,000 | |
| (b) Inventories | 1,20,000 | 1,21,000 | |
| (c) Trade Receivables | 1,70,000 | 1,43,000 | |
| (d) Cash and Cash Equivalents | 3,20,000 | 3,75,000 | |
| Total | 19,60,000 | 17,51,000 | |
Notes to Accounts:
| Note No. |
Particulars | 31st March, 2021 (₹) |
31st March, 2020 (₹) |
| 1. | Reserve and Surplus: | 3,00,000 | 2,00,000 |
| Surplus i.e. Balance in | |||
| Statement of Profit & Loss | |||
| 2. | Tangible Assets: | ||
| Machinery | 12,70,000 | 10,00,000 | |
| Accumulated Depreciation | (2,00,000) | (1,50,000) | |
| 10,70,000 | 8,50,000 | ||
| 3. | Intangible Assets: | ||
| Goodwill | 4,000 | 1,12,000 |
Additional Information:
A piece of machinery costing ₹ 24,000 on which accumulated depreciation was ₹ 16,000, was sold for ₹ 6,000.
Interest of ₹3,000 received in cash on loans and advances will result in :
In case of a financial enterprise whose main business is lending and borrowing, ‘interest paid' and ‘interest received’ are classified as ______.
Match the transactions given in column - II with their correct category given in Column - I for the purpose of preparation of 'Cash Flow Statement'.
| Column - I | Column - II | ||
| (a) | Investing Activity | (i) | Interest paid |
| (b) | Financing Activity | (ii) | Purchase of Goodwill |
| (c) | Operating Activity | (iii) | Cash receipts from sale of goods |
Which of the following activities are operating activities for the purpose of preparing 'Cash flow statement'?
- Dividend and Interest received on securities.
- Payment of employee benefit expenses.
- Cash receipts from royalties and fees.
- Issue of shares against purchase of machinery.
Prepare a Cash Flow Statement from the following Balance Sheets of Arya Ltd.:
| Particulars | Note | 31.3.2023 (₹) | 31.3.2022 (₹) | |
| I. | Equity and Liabilities: | |||
| (1) | Shareholders’ Funds: | |||
| a) | Share Capital | 1 | 10,00,000 | 8,00,000 |
| b) | Reserves and Surplus | 2 | 6,40,000 | 5,40,000 |
| (2) | Non-Current Liabilities: | |||
| Long-term Borrowings | 1,50,000 | 1,00,000 | ||
| (3) | Current Liabilities: | |||
| a) | Trade Payables | 3 | 30,000 | 12,000 |
| b) | Short-term Provisions | 30,000 | 28,000 | |
| Total | 18,50,000 | 14,80,000 | ||
| II. | Assets: | |||
| (1) | Non-Current Assets: | |||
| a) | Property, Plant and equipment and intangible assets: Property, Plant and Equipment |
4 | 7,75,000 | 4,90,000 |
| b) | Non-current Investments | 90,000 | 50,000 | |
| (2) | Current Assets | |||
| a) | Inventory | 6,20,000 | 4,13,000 | |
| b) | Trade receivables | 3,20,000 | 4,94,000 | |
| c) | Cash & Cash Equivalents | 45,000 | 33,000 | |
| Total | 18,50,000 | 14,80,000 |
Notes to Accounts:
| Particulars | 31.3.2023 | 31.3.2022 | |
| 1. | Reserves & Surplus: | ||
| General Reserve | 5,00,000 | 4,30,000 | |
| Capital Reserve | 60,000 | 50,000 | |
| Surplus ie balance in statement of profit and loss | 80,000 | 60,000 | |
| 6,40,000 | 5,40,000 | ||
| 2. | Long-term Borrowings: | ||
| 10% Debentures | 1,50,000 | 1,00,000 | |
| 3. | Short-term Provisions: | ||
| Provision for tax | 30,000 | 28,000 | |
| 4. | Tangible Assets: | ||
| Plant and Machinery | 7,75,000 | 4,90,000 |
Additional Information:
- Tax provided during the year is ₹ 17,000.
- Depreciation charged on plant and Machinery during the year amounted to ₹ 1,20,000.
- Non-current Investments costing ₹ 30,000 were sold for ₹ 40,000 during the year. Gain on sale of Investments was credited to Capital Reserve.
- Additional Debentures were issued on 31.03.2023.
