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प्रश्न
The accountant of 'Nav Jeevan Limited' while preparing Cash Flow Statement added the proposed
dividend of the current year to net profit while calculating cash flow from operating activities. Was he correct in doing so? Give reason.
उत्तर
Yes, the accountant was correct while adding the proposed dividend of the current year to net profits while calculating cash flow from operating activities. This helps in the correct computation of the net profit before tax and extraordinary items.
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संबंधित प्रश्न
Following is the Balance Sheet of SN Ltd as at 31-3-2015:
S.N Ltd Balance Sheet as at 31-3-2015
| Particulars | Note No. | 31-03-2015 (Rs.) | 31-03-2014 (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) Short – term borrowings b) Short – term provisions |
1
2
3 4 |
2,50,000 1,00,000
2,25,000
75,000 35,000 |
2,00,000 (25,000)
2,50,000
25,000 45,000 |
| Total | 6,85,000 | 4,95,000 | |
|
II. Assets 1. Non – Current Assets a) Fixed Assets Tangible assets Intangible b) Non – Current Investments 2. Current Assets a) Current Investments b) Inventories c) Cash and Cash Equivalents |
5 6
7
|
5,01,500 10,000 50,000
25,000 53,500 45,000 |
3,60,000 15,000 37,500
30,000 22,500 30,000 |
| Total | 6,85,000 | 4,95,000 |
| Note No. | Particulars | 31-3-2015 (Rs.) | 31-3-2014 (Rs.) |
|
1.
|
Reserve and Surplus (Surplus i.e. Balance in Statement of Profit and Loss) |
1,00,000 |
(25,000) |
| 1,00,000 | (25,000) | ||
|
2.
|
Long term borrowings : 12 % Debentures |
2,25,000 |
2,50,000 |
| 2,25,000 | 2,50,000 | ||
|
3.
|
Short – term borrowings : Bank Overdraft |
75,000 |
25,000 |
| 75,000 | 25,000 | ||
|
4.
|
Short – term provisions Provisions for tax |
35,000 |
45,000 |
| 35,000 | 45,000 | ||
|
5.
|
Tangible Assets Machinery Accumulated Depreciation |
6,01,500 (1,00,000) |
4,10,500 (50,500) |
| 5,01,500 | 3,60,000 | ||
|
6.
|
Intangible Assets Goodwill |
10,000 |
15,000 |
| 10,000 | 15,000 | ||
|
7.
|
Inventories Stock in trade |
53,500 |
22,500 |
| 53,500 | 22,500 |
Additional Information
(i) 12% Debentures were redeemed on 31-3-2015
(ii) Tax Rs.35,000 was paid during the year
Prepare Cash flow Statement
Why is separate disclosure of cash flows from investing activities important? State.
'Interest received and paid' is considered as which type of activity by a finance company while preparing a Cash Flow Statement?
Following is the Balance Sheets of Thermal Power Ltd. as at 31-3-2014
| Thermal Power Ltd Balance Sheet as at 31-3-2014 |
|||
| Particulars | Note No. |
2013-2014 Rs |
2012-2013 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
|
12,00,000 3,00,000
2,40,000
1,79,000 50,000 |
11,00,000 2,00,000
1,70,000
2,04,000 77,000 |
| Total | 19,69,000 | 17,51,000 | |
|
II. Assets 1. Non – Current 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 |
2 3
|
10,70,000 40,000
2,40,000 1,29,000 1,70,000 3,20,000 |
8,50,000 1,12,000
1,50,000 1,21,000 1,43,000 3,75,000 |
| Total | 19,69,000 | 17,51,000 | |
Notes to Accounts
| Note No | Particulars | 31-3-2015 | 31-3-2014 |
|
1
2
3
|
Reserve and Surplus (Surplus i.e. Balance in Statement of Profit and Loss) Tangible Assets Machinery Less: Accumulated Depreciation Intangible Assets Goodwill |
3,00,000
12,70,000 (2,00,000)
40,000 |
2,00,000
10,00,000 (1,50,000)
1,12,000 |
Additional Information:
During the year a piece of machinery, costing Rs 24,000 on which accumulated depreciation was Rs 16,000, was sold for Rs 6,000.
Prepare Cash Flow Statement
While preparing Cash Flow statement of Sharda Ltd. 'Depreciation provided on fixed assets' was added to net profit to calculate cash flow from operating activities. Was the accountant correct in doing so? Give reason.
While preparing Cash Flow Statement, the accountant of a financing company showed 'Dividend Received Rs 50,000 on investments' as an investing activity. Was he correct in doing so? Give reason.
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.
State with reason whether deposit of cash into Bank will result into inflow, outflow or no flow of cash.
Short Answer Question
“The nature/type of enterprise can change altogether the category into which a particular activity may be classified.” Do you agree? Illustrate your answer.
Following are the extracts from the Balance Sheet of MAH Ltd. as at 31st March, 2019
|
Particular |
31st March 2019 (₹) |
31st March 2018 (₹) |
| Surplus, i.e., Balance in Statement of Profit and Loss |
10,00,000 |
5,00,000 |
| Dividend Payable |
50,000 |
– |
Additional Information: Proposed Dividend for the years ended 31st March, 2018 and 2019 are ₹ 4,00,000 and ₹ 5,00,000 respectively.
Prepare the Note to show Net Profit before Tax and Extraordinary Items.
What is meant by 'Cash Flows' ?
What are the benefits of cash flow statements ______?
Name the activities that is related to purchase and sale of long-term assets or fixed assets such as machinery, furniture, land and building, etc.?
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."
Classify the following activity into operating activities, investing activities, financing activities or cash activities
"Interest and Dividend received": In case of a financial enterprise (whose main business is lending and borrowing)
Cash flow example from an Investing activity is:
Which of the following is not an investing cash flow?
