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प्रश्न
Answer the following question:
State any one objective of preparing Cash Flow Statement.
State the primary objective of preparing cash flow statement.
उत्तर १
The foremost objective to prepare Cash Flow Statement is to ascertain gross inflows and outflows of cash and cash equivalents from various activities of a business.
उत्तर २
The primary objective of the cash flow statement is to provide useful information about cash flows (inflows and outflows) of an enterprise during a particular period under various heads, i.e., operating activities, investing activities, and financing activities.
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’.
Prepare a Cash Flow Statement from the information given in the balance sheet of live Ltd. as at 31-3-2013and 31-3-2012:
| Balance Sheet of Tiger Super Steel Ltd |
|||
| Particulars | Note No. | 31-3-2015 (Rs.) | 31-3-2014 (Rs.) |
|
I. Equity and Liabilities 1. Shareholder’s Funds a. Equity Share Capital b. Reserve and Surplus 2. Non - Current Liabilities a) Long term borrowings 3. Current Liabilities a) Trade Payables |
1 |
2,10,000 1,32,000
1,50,000
75,000 |
1,80,000 24,000
1,50,000
27,000 |
| Total | 5,67,000 | 3,81,000 | |
|
II. Assets 1. Non – Current Assets a) Fixed Assets Tangible assets b) Non – Current Investments 2. Current Assets a) Current Investments (marketable) b) Inventories c) Trade Receivable c) Cash and Cash equivalents |
2,94,000 48,000
54,000 1,07,000 40,000 24,000 |
2,52,000 18,000
60,000 24,000 17,500 9,500 |
|
| Total | 5,67,000 | 3,81,000 | |
|
Notes to Account: Note -1 |
||
| Particulars | 2013 (Rs.) | 2012 (Rs.) |
|
Reserve and Surplus Surplus (balance in statement of profit and loss) |
1,32,000 |
24,000 |
While preparing 'Cash Flow Statement', the accountant of 'Jain Limited', a financing company, showed dividend received on investments as investing activity. Was he correct in doing so? Give reason.
'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’.
From the following Balance Sheets of Sonam Ltd as on 31-3-2012 and 31-3-2011.
Prepare a Cash Flow Statements:
|
Liabilities |
31-3-2011 Rs |
31-3-2011 Rs |
Assets |
31-3-2011 Rs |
31-3-2011 Rs |
|
Equity Shares Capital Profit and Loss Account Bank Loan Proposed Dividend Provision for tax Creditors |
1,00,000
25,000
50,000 20,000
10,000 15,000
|
1,50,000
50,000
25,000 15,000
17,500 11,250 |
Patents Building Investment Debtors Stock Cash
|
12,500 1,50,000 - 50,000 2,500 5,000 |
11,250 1,50,000 18,750 3,750 21,250 |
|
|
|
||||
|
2,20,000 |
2,68,750 |
|
2,20,000 |
2,68,750 |
|
|
|
|
|
|
Additional Information:
During the year a Building having book value Rs 50,000 was sold at a loss of Rs 2,000 and deprecation charged on Building was Rs 4,000
What is the object of preparing a Cash Flow Statements?
The important objectives for preparing Cash Flow Statement are as follows.
- It helps to ascertain the gross inflows and outflows of cash and cash equivalents from various activities.
- Secondly, Cash Flow Statement helps in analysing various reasons responsible for change in the cash balances during an accounting year.
You are required to prepare a Cash-Flow Statement (as per AS-3)
for the year 2016-17 from the following Balance Sheet.
Balance Sheet of Honesty Ltd.
As at 31st March, 2016 and 31st March, 2017
| I | Particulars | Note No. | 31.03.2017 |
31.03.2017 |
| 1. |
EQUITY AND LIABILITIES |
1. |
14,00,000 5,00,000
|
10,00,000 4,00,000
|
| 2. | Non-Current Liabilities Long Term Borrowing (10% Debentures) |
5,00,000 | 1,40,000 | |
| 3. | Current Liabilities (a) Short Term Borrowings (Bank Overdraft) (b) Trade Payables (Creditors) (c) Short Term Provisions |
20,000 1,00,000 60,000 |
30,000 60,000 30,000 |
|
| TOTAL | 25,80,000 | 16,60,000 | ||
| II 1. | ASSETS Non-Current Assets Fixed Assets (i) Tangible (ii) Intangible (Goodwill) |
2. |
16,00,000 1,40,000 |
9,00,000 2,00,000 |
| 2. | Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Bank Balances (Cash at Bank) |
2,50,000 5,00,000 90,000 |
2,00,000 3,00,000 60,000 |
|
| TOTAL | 25,80,000 | 16,60,000 |
Notes to Accounts:
| Particulars | 31.03.2017 | 31.03.2016 |
| 1. Short term provisions provision for taxation |
60,000 | 30,000 |
| 2. Fixed Assets (Tangible) Plant and Machinery Less Accumulated Depreciation |
17,60,000 (1,60,000) |
10,00,000 (1,00,000) |
| 16,00,000 | 9,00,000 |
During the year 2016-17:
(i) A part of the machine, costing Rs. 50,000, accumulated depreciation thereon being Rs. 20,000, was sold for
Rs.18,000.
(ii) Tax paid Rs. 20,000.
(iii) Interest of Rs. 50,000 paid on Debentures.
Long Answer Question
Describe the procedure to prepare Cash Flow Statement.
Long Answer Question
Describe"Indirect" method of ascertaining Cash Flow from Operating Activities.
The following is the Profit and Loss Account of Yamuna Limited:
|
Statement of Profit and Loss of Yamuna Ltd., for the Year ended March 31, 2017 |
|||
| Particulars | Note No. | Amount (₹) | |
| i) | Revenue from Operations | 10,00,000 | |
| ii) | Expenses | ||
|
|
Cost of Materials Consumed | 1 | 50,000 |
| Purchase of Stock-in-trade | 5,00,000 | ||
| Other Expenses | 2 | 3,00,000 | |
| Total Expenses | 8,50,000 | ||
| iii) | Profit before Tax (i – ii) | 1,50,000 | |
Additional information:
- Trade receivables decrease by Rs 30,000 during the year.
- Prepaid expenses increase by Rs 5,000 during the year.
- Trade payables increase by Rs 15,000 during the year.
- Outstanding expenses payable increased by Rs 3,000 during the year.
- Other expenses included a depreciation of Rs 25,000.
Compute net cash from operations for the year ended March 31, 2017 by the indirect method.
Name the activities that constitute the primary or main activities of an enterprise?
Which one is Cash Outflows from operating activities?
Which item comes under Financial Activities in the Cash Flow statement?
Which of the following is not an investing cash flow?
From the following information, find out Cash Outflow from Financing Activities.
| Year I | Year II | |
| Proposed Dividend | ₹ 1,20,000 | ₹ 1,50,000 |
| 12% debentures | ₹ 4,00,000 | ₹ 5,00,000 |
Additional Information:
Additional Debentures were issued at the end of the year.
Interim Dividend paid ₹ 50,000
Preference Share Capital Issued ₹ 2,00,000
From the following Balance Sheets of Rainbow Ltd., you are required to prepare a Cash Flow Statement (as per As 3) for the year 2021 - 22.
| Balance Sheets of Rainbow Ltd. As at 31st March, 2022 and 31st March, 2021 |
|||
| Particulars | Note no. | 31.3.2022 (₹) |
31.3.2021 (₹) |
| I. Equity and liabilities | |||
| 1. Shareholder's Funds | |||
| (a) Share Capital (Equity) | 4,00,000 | 4,00,000 | |
| (b) Reserve and Surplus | 1 | 1,60,000 | 1,20,000 |
| 2. Non-Current Liabilities | |||
| Long-term Borrowings (5% Debentures) | 3,50,000 | 2,60,000 | |
| 3. Current Liabilities | |||
| Short term Provision (Provision for Tax) | 30,000 | 25,000 | |
| Total | 9,40,000 | 8,05,000 | |
| II. Assets | |||
| 1. Non-Current Assets | |||
| Property, Plant & Equipment & Intangible Assets | |||
| (i) Property, Plant & Equipment (Plant & Machinery) | 6,00,000 | 7,80,000 | |
| 2. Current Assets | |||
| Cash & Bank Balances (Cash at Bank) | 3,40,000 | 25,000 | |
| Total | 9,40,000 | 8,05,000 | |
Notes to Accounts:
| Particulars | 31.3.2022 (₹) | 31.3.2021 (₹) |
| I. Reserves and Surplus | ||
| General Reserve | 30,000 | 20,000 |
| Balance in Statement of Profit and Loss | 1,30,000 | 1,00,000 |
Additional Information:
During the year 2021-22, the company:
- Sold a machine for ₹ 90,000 at a loss ₹10,000.
- Issued the 5% Debentures on 31st March; 2022, at a discount of 10%. The discount was written off from General Reserve.
