Question

Following was the Balance Sheet of M.M Ltd at on 31.3.2015.

                                                        M.M. Ltd Balance Sheet as at 31-3-2015

Particulars	Note No.	31-3-2015 (Rs.)	31-3-2014 (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	5,00,000 2,00,000   4,50,000   1,50,000 70,000	4,00,000 (50,000)   5,00,000   50,000 90,000
Total		13,70,000	9,90,000
II. Assets      1. Non – Current Assets                a) Fixed Assets                      Tangible assets                      Intangible assets                b) Non – Current Investments       2. Current Assets                 a) Current Investments                 b) Inventories                 c) Cash and Cash Equivalents	5 6       7	10,03,000 20,000 1,00,000   50,000 1,07,000 90,000	7,20,000 30,000 75,000   60,000 45,000 60,000
Total		13,70,000	9,90,000

 

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)	2,00,000	(50,000)
		2,00,000	(50,000)
2.	Long term borrowings : 12 % Debentures	4,50,000	5,00,000
		4,50,000	5,00,000
3.	Short – term borrowings : Bank Overdraft	1,50,000	50,000
		1,50,000	50,000
4.	Short – term provisions Provisions for tax	70,000	90,000
		70,000	90,000
5.	Tangible Assets Machinery Accumulated Depreciation	12,03,000 (2,00,000)	8,21,000 (1,01,000)
		10,03,000	7,20,000
6.	Intangible Assets Goodwill	20,000	30,000
		20,000	30,000
7.	Inventories Stock in trade	1,07,000	45,000
		1,07,000	45,000

Additional Information

(i) 12% Debentures were redeemed on 31-3-2015

(ii) Tax Rs. 70,000 was paid during the year

Prepare Cash flow Statement.

Answer 1

                                                                               Cash Flow Statement

                                                                     for the year ended 31st March 2015

	Particulars	Amount (Rs.)	Amount (Rs.)
I	Cash Flow from Operating Activities A. Net Profit before Tax and Extraordinary items*        Adjustments for Non-Cash and Non – Operating Items B. Add : Items to be added Depreciation Intagible Assets Written off Interest on Debentures (12% of 5,00,000) Provision for Tax   C. Less : Items to be Deducted   D. Operating Profit before Working Capital Adjustments (A+B-C) E. Add : Decrease in Current Assets and Increase in Current Liabilities F: Less : Increase in Current Assets and Decrease in Current Liabilities Inventories               Cash Generated from Operations (D+E-F) Less : Income Tax Paid (Net of Refund)               Net Cash Flows from (or used in) Operating Activities	99,000 10,000 60,000 50,000 ______________   ______________       62,000 ______________   70,000 ______________	2,50,000           2,19,000     ______________ 4,69,000     (62,000) ______________ 4,07,000 (70,000) ______________ 3,37,000
II	Cash Flow from Investing Activities Purchase of Fixed Assets (12,03,000 – 8,21,000) Purchase of Non – Current Investments                 Net Cash Flows (or used in) Investing Activities	(3,82,000) (25,000) ______________	(4,07,000)
III	Cash Flow from Financing Activities Proceeds from Issue of Share Capital Redemption of Debentures Interest Paid on Debentures Increase in Bank Overdraft                Net Cash Flow from Financing Activities	1,00,000 (50,000) (60,000) 1,00,000 ______________	90,000
IV	Net Increase or Decrease in Cash and Cash Equivalents (I+ II+III)              Add : Cash and Cash Equivalents in the beginning of the period                      (includes Current Investments of 60,000)		20,000 1,20,000
	Cash and Cash Equivalents at the end of the period (Includes Current Investments of 50,000)		1,40,000

 

                                                       Provision For Tax Account

Dr.                                                                                                                                              Cr.

Particulars	Amount(Rs.)	Particulars	Amount(Rs.)
To Bank A/c To Balance c/d	70,000 70,000	By Balance b/d By Statement of Profit and Loss	90,000 50,000
	1,40,000		1,40,000