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
L Ltd. had purchased machinery on deferred payment basis. During the year ended 31-3-2015 the company paid an installment of Rs.4,00,000 which included interest of Rs.4,000. Under which activity or activities payment of installment will be classified while 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 |
'Interest received and paid' is considered as which type of activity by a finance company while preparing a Cash Flow Statement?
Will 'Net decrease in working capital' other than cash and cash equivalents, increase, decrease or not change Cash Flow from Operating Activities? Give reason in support of your answer.
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 'Jain Limited', a financing company, showed dividend received on investments as investing activity. Was he correct in doing so? Give reason.
Net increase in working capital other than cash and cash equivalents will increase, decrease or not change cash flow from operating activities. Give reason in support of your answer.
State any two advantages of preparing cash flow statement.
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.
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
‘Payment of dividend’ will come under which type of activity while preparing a Cash Flow Statement?
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.
Long Answer Question
Explain the major Cash Inflows and outflows from financing 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.
From the following information, prepare cash flow statement:
| Particulars | Note No. | 31st March 2015 (Rs) |
31st March 2014 (Rs) |
| I) Equity and Liabilities | |||
|
1. Shareholders’ Funds |
|||
|
a) Share capital |
7,00,000 | 5,00,000 | |
|
b) Reserves and surplus |
4,70,000 | 2,50,000 | |
|
2. Non-current Liabilities |
|||
|
(8% Debentures) |
4,00,000 | 6,00,000 | |
|
3. Current Liabilities |
|||
|
a) Trade payables |
9,00,000 | 6,00,000 | |
| Total | 24,70,000 | 19,50,000 | |
| II) Assets | |||
|
1. Non-current assets |
|||
|
a) Fixed assets |
|||
|
i) Tangible |
7,00,000 | 5,00,000 | |
|
ii) Intangible-Goodwill |
1,70,000 | 2,50,000 | |
|
2. Current assets |
|||
|
a) Inventories |
6,00,000 | 5,00,000 | |
|
b) Trade Receivables |
6,00,000 | 4,00,000 | |
|
c) Cash and cash equivalents |
4,00,000 | 3,00,000 | |
| Total | 24,70,000 | 19,50,000 |
Additional Information:
Depreciation Charge on Plant amount to Rs. 80,000.
______ means short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Classify the following activity into operating activities, investing activities, financing activities or cash activities.
"Cash Sales"
Cash from Operating Activities will decrease due to:
From the following Balance Sheets of Ronald Ltd., you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2023-24.
| Balance Sheets of Ronald Ltd. As at 31st March, 2024 and 31st March, 2023 |
|||
| Particulars | Note No. | 31.03.2024 (₹) | 31.03.2023 (₹) |
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholder's Funds | |||
| (a) Share Capital | 6,00,000 | 6,00,000 | |
| (b) Reserves and Surplus (Statement of P & L) | 80,000 | (60,000) | |
| 2. Non-Current Liabilities | |||
| Long Term Borrowings | 1,00,000 | 1,50,000 | |
| 3. Current Liabilities | |||
| (a) Short-term borrowings (Bank overdraft) | 1,75,000 | 22,000 | |
| (b) Short Term Provisions (Provision for Tax) | 15,000 | 28,000 | |
| Total | 9,70,000 | 7,40,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| (a) Property, Plant & Equipment & Intangible Assets | |||
| (i) Property, Plant & Equipment (Plant & Machinery) | 5,50,000 | 6,40,000 | |
| (b) Non- Current Investments (7% Debentures of Violet Ltd.) | 1,40,000 | 50,000 | |
| 2. Current Assets | |||
| Cash & Bank Balance (Bank) | 2,80,000 | 50,000 | |
| Total | 9,70,000 | 7,40,000 | |
Additional information:
- The Debentures of Violet Ltd. were purchased on 31st March, 2024.
- During the year 2023-24:
- Tax of ₹ 20,000 was paid.
- Interest on all borrowings due and paid was ₹ 25,000.
