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प्रश्न
Short Answer Question
What are the objectives of preparing cash flow statement?
उत्तर
The important objectives for preparing Cash Flow Statement are as follows:
1. The most important objective that is fulfilled by preparing Cash Flow Statement is to ascertain the gross inflows and outflows of cash and cash equivalents from various activities.
2. Secondly, Cash Flow Statement helps in analysing various reasons responsible for change in the cash balances during an accounting year.
3. This statement helps in analysing and understanding the liquidity and solvency of a company , thereby, depicting the true liquidity position to the creditors and the investors.
4. Cash Flow Statement also helps in ascertaining the requirement and availability of cash in near future.
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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'.
Which of the following transactions will result in the flow of cash?
(1) Cash was withdrawn from bank Rs 20,000.
(2) Issued Rs 20,000; 9% debentures for the vendors of machinery.
(3) Received Rs 19,000 from debtors.
(4) Deposited cheques of Rs 10,000 into the bank
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.
State any two advantages of preparing cash flow statement.
What is meant by 'Cash Flow' while preparing Cash Flow Statement?
From the following Balance Sheet of Vijay Ltd. as on 31-3-2009 and 31-3-2010 prepare a Cash Flow Statement.
|
Liabilities |
31-3-2009 Rs |
31-3-2010 Rs |
Assets |
31-3-2009 Rs |
31-3-2010 Rs |
|
Share Capital |
45,000 |
65,000 |
Fixed Assets |
46,700 |
83,000 |
|
General Reserve |
15,000 |
27,500 |
Stock |
11,000 |
13,000 |
|
Profit and Loss Account |
10,000 |
15,000 |
Debtors |
18,000 |
19,500 |
|
Trade Creditors |
8,700 |
11,000 |
Cash |
2,000 |
2,500 |
|
|
|
|
Preliminary Expenses |
1,000 |
500 |
|
|
78,700 |
1,18,500 |
|
78,700 |
1,18,500 |
|
|
|
|
|
|
|
Additional Information:
(i) Depreciation on Fixed assets for the year 2009-2010 was Rs 14,700
(ii) An interim dividend Rs 7,000 has been paid to the shareholders during the year.
‘Payment of dividend’ will come under which type of activity while preparing a Cash Flow Statement?
Short Answer Question
State clearly what would constitute the operating activities for each of the follow in the following of enterprises:
(i) Hotel
(ii) Film production house
(iii) Financial enterprise
(iv) Media enterprise
(v) Steel manufacturing unit
(vi) Software development business unit.
Compute cash from operations from the following figures:
(i) Profit for the year 2016-17 is a sum of Rs. 10,000 after providing for depreciation of Rs. 2,000.
(ii) The current assets and current liabilities of the business for the year ended March 31, 2016 and 2015 are as follows:
| Particular | March 31, 2016 (Rs) |
March 31, 2017 (Rs) |
| Trade Receivables | 14,000 | 15,000 |
| Provision for Doubtful Debts | 1,000 | 1,200 |
| Trade Payables | 13,000 | 15,000 |
| Inventories | 5,000 | 8,000 |
| Other Current Assets | 10,000 | 12,000 |
| Expenses payable | 1,000 | 1,500 |
| Prepaid Expenses | 2,000 | 1,000 |
| Accrued Income | 3,000 | 4,000 |
| Income received in advance | 2,000 | 1,000 |
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.
Which one is Cash Inflows from operating activities?
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.?
Which one is Cash Outflows from Financing activities?
What is the primary objective of cash flow statement?
Balance Sheet (Extract)
| Liabilities | 30-03-2018 (₹) | 31-03-2017 (₹) |
| Fixed Assets | 23,80,000 | 17,50,000 |
Depreciation on fixed assets was ₹ 2,00,000 for the year. How much amount for 'Purchase of fixed assets' will be shown in investing activity for cash flow statement prepared on 31st March, 2018?
Which item comes under Financial Activities in the Cash Flow statement?
State whether the following transaction will result in inflow, outflow or no flow of cash while preparing cash flow statement:
Issued bonus shares ₹ 5,00,000.
State whether the following transaction will result in inflow, outflow or no flow of cash while preparing cash flow statement:
Interest received in cash from loans and advances ₹ 80,000.
From the following information of Hoopla Ltd., you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2021 - 22.
| Particulars | (₹) | |
| (i) | Profit for the year 2021-22, before considering dividend and tax but after taking into account the following items: |
15,80,000 |
| (a) Depreciation on Property, Plant & Equipment | 5,50,000 | |
| (b) Interest Payable on Bank Loan | 3,80,000 | |
| (c) Profit on sale of investments, the book value of which was ₹ 2,20 000. |
1,00,000 | |
| (ii) | During the year 2021-22: | |
| (a) The company | ||
| • Paid Tax (which was provided in 2020 - 21) | 4,40,000 | |
| • Issued 66,000 equity shares of ₹ 10 each | 6,60,000 | |
| • Repaid Bank Loan | 15,00,000 | |
| • Paid interest on Bank Loan | 3,00,000 | |
| • Paid Dividend | 5,00,000 | |
| (b) Trade payables decreased by | 10,000 | |
| (c) Cash at bank increased from ₹ 60,000 on 1st April, 2021 to ₹ 7,00,000 on 31st March, 2022. |
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.
