Advertisements
Advertisements
प्रश्न
Give the meaning of ‘Cash Equivalents’ for the purpose of preparing Cash Flow Statement.
What is meant by ‘Cash Equivalent’ while preparing Cash Flow Statement?
उत्तर
Cash Equivalents are short-term highly liquid investments that can be readily convertible into cash and are subject to an insignificant risk of change in value. They are held for the purpose of meeting shortterm cash commitments. A few of the examples of cash equivalents are treasury bills, commercial bills, call money etc.
APPEARS IN
संबंधित प्रश्न
'An enterprise may hold securities and loans for dealing or trading purposes in which case they are similar to inventory acquired specifically for resale.' Is the statement true? Cash flows from such activities will be classified under which type of activity while preparing 'Cash flow statement'.
State the objective of preparing ‘Cash Flow statement’.
Does movement between items that constitute cash or cash equivalents result into cash flow? Give reason in support of your answer.
While preparing the Cash Flow Statement the accountant of Gulfam Ltd., a financing company showed Dividend received on Investments as Investing Activity. Was he correct in doing so? Give reason.
While preparing the Cash Flow Statement of Alka Ltd. 'dividend paid' was shown as an operating
activity by the accountant of the company. Was he correct in doing so? Give reason.
Following is the Balance Sheets of Wind Power Ltd as at 31.3.2014:
| Wind Power Ltd Balance Sheet as at 31.3.2014 |
|||
| Particulars | Note No |
2013-14 Rs |
2012-13 Rs |
|
I. Equity and Liabilities 1. Shareholder’s Funds a. Share Capital b. Reserve and Surplus 2. Non - Current Liabilities a. Long-term borrowings 3. Current Liabilities a. Trade Payables b. Short-Term Provisions |
1
|
48,00,000 12,00,000
9,60,000
7,16,000 2,00,000 |
44,00,000 8,00,000
6,80,000
8,16,000 3,08,000 |
| Total | 78,76,000 | 70,04,000 | |
|
II. Assets a) Fixed Assets (i) Tangible assets (ii) Intangible b) Non – Current Investments 2. Current Assets a) Current Investments b) Inventories c) Trade Receivables d)Cash and Cash Equivalents |
2 3
|
42,80,000 1,60,000
9,60,000 5,16,000 6,80,000 12,80,000 |
34,00,000 4,80,000
4,48,000 4,84,000 5,72,000 16,20,000 |
| Total | 78,76,000 | 70,04,000 | |
Notes to Accounts
| Note No |
Particulars | As On 31-3-2014 |
As On 31-3-2013 |
| 1 |
Reserve and Surplus |
12,00,000 |
8,00,000 |
|
2
|
Tangible Assets Machinery Less: Accumulated Depreciation |
50,80,000 (8,00,000) |
40,00,000 (6,00,000) |
|
3
|
Intangible Assets Goodwill |
1,60,000 |
4,80,000 |
Additional information
During the year a piece of machinery, costing Rs 96,000 on which accumulated depreciation was Rs 64,000 was sold for Rs 24,000.
Prepare Cash Flow Statement
Prepare a Cash Flow Statement from the information given in the balance sheet of Simco Ltd. As at 31-3- 2013and 31-3-2012:
| Particulars | Note No. |
31-3-2013 Rs |
31-3-2012 Rs |
|
I. Equity and Liabilities 1. Shareholders' Funds a. Equity Share Capital b. Reserves and Surplus 2. Non-current Liabilities a. Long term-borrowing 3. Current liabilities a. Trade Payables |
2,00,000 90,000
87,500
10,000 |
1,50,000 75,000
87,500
76,000 |
|
| Total | 3,87,500 | 3,87,500 | |
|
II. Assets 1. Non- Current assets a. Fixed assets i. Tangible assets b. Non –Current Investment 2. Current assets a. Current-Investment (marketable) b. Inventory c. Trade receivable d. Cash and Cash equivalents |
1,87,500 1,05,000
12,500 4,000 9,500 68,500 |
1,40,000 1,02,500
33,500 5,500 23,000 84,000 |
|
| Total | 3,87,500 | 3,88,500 |
Notes to Account:
Note -1
| Particulars |
2013 Rs |
2012 Rs |
| Reserve and Surplus | ||
| Surplus( balance in the statement of profit and loss) | 90,000 | 75,000 |
State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment':
(i) Purchase of machinery worth Rs 2,00,000 by issue of equity shares.
(ii) Charging depreciation of Rs 5,000 on machinery.
(iii) Redemption of debentures in cash Rs 70,000.
(iv) Converting Rs 50,000, 9% debentures into equity shares.
'Cash advances and loans' made by financial enterprises will be shown under which type of activity while preparing cash flow statement? Give reason in support of your answer.
State the purpose of preparing a ‘Cash Flow Statement’.
State with reason whether deposit of cash into Bank will result into inflow, outflow or no flow of cash.
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Purchase of machinery"
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Proceeds from issuance of equity share capital."
Classify the following activity into operating activities, investing activities, financing activities or cash activities ·
"Proceeds from long-term borrowings."
Cash Flow Statement is based upon ______.
An example of Cash Flows from Operating Activity is ______
Cash flow example from an Investing activity is:
Cash flow example from an operating activity is ______.
In case of financial enterprises, the cash flow resulting from interest and dividend received and interest paid should be classified as cash flow from ______.
Interest collected by an automobile company selling a car on an instalment basis will be classified as:
