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प्रश्न
While preparing Cash Flow Statement, the accountant of 'Rachana Ltd.', a financing company, included 'Interest received on loan' in financing activities. Was the correct in doing so? Give reason.
उत्तर
The accountant was wrong in his approach of showing 'Interest received on Loan' under 'Financing Activity'. Interest received on loan by a financing company is cash inflow from operating activities. So it is to be categorised under 'Cash Flow from Operating Activities'.
APPEARS IN
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'.
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.
'Interest received and paid' is considered as which type of activity by a finance company while preparing a Cash Flow Statement?
From the following Balance Sheet of JY Ltd. as at 31st March 2017, prepare a Cash Flow Statement :
| Balance Sheet of JY Ltd. as at 31.3.2017 |
|||
| Particular | Note No. |
31-3-2017 Rs |
31-3-2016 Rs |
|
I. Equity and Liabilities 1. Shareholders' Funds: (a) Share capital (b) Reserves and surplus 2. Non-current Liabilities: Long term-borrowing 3. Current Liabilities: (a) Short-term borrowings (b) Short-term provisions |
1
2
3 4 |
5,00,000 1,00,000
2,50,000
1,50,000 2,00,000 |
5,00,000 (25,000)
1,50,000
1,00,000 1,25,000 |
| Total | 12,00,000 | 8,50,000 | |
|
II. Assets 1. Non- Current Assets: (a) Fixed Assets: (i) Tangible 2. Current Assets: (a) Trade Receivable (b) Cash and Cash Equivalents (c) Short-term Loans and Advances |
5
|
6,00,000
2,75,000 1,25,000 2,00,000 |
4,50,000
2,25,000 75,000 1,00,000 |
| Total | 12,00,000 | 8,50,000 | |
Notes to Accounts
| Note No | Particulars |
31-3-2017 Rs |
31-3-2016 Rs |
|
1
2
3
4
5
|
Reserve and Surplus (Surplus i.e. Balance in Statement of Profit and Loss)
|
1,00,000 |
(25,000) |
| 1,00,000 | (25,000) | ||
|
Long-term borrowings : 10 % Debentures
|
2,50,000 |
1,50,000 |
|
| 2,50,000 | 1,50,000 | ||
|
Short-term borrowings : Bank Overdraft
|
1,50,000 |
1,00,000 |
|
| 1,50,000 | 1,00,000 | ||
|
Short-term provisions: (i) Proposed Dividend (ii) Provision for Tax
|
75,000 1,25,000 |
50,000 75,000 |
|
| 2,00,000 | 1,25,000 | ||
|
Tangible Assets: Machinery Accumulated Depreciation
|
7,37,500 (1,37,500) |
5,25,000 (75,000) |
|
| 6,00,000 | 4,50,000 |
Additional Information:
Rs 1,00,000, 10% Debentures were issued on 31-3-2017.
State whether the following will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':
1) A decrease in outstanding employees benefits expenses by Rs 3,000
2) Increase in prepaid insurance by Rs 2,000
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
Which of the following transactions will result in the flow of cash?
Following is the Balance Sheets of Wind Power Ltd as at 31.3.2014:
| Wind Power Ltd Balance Sheet as at 31.3.2014 |
|||
| Particulars | Note No |
2013-14 Rs |
2012-13 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
|
48,00,000 12,00,000
9,60,000
7,16,000 2,00,000 |
44,00,000 8,00,000
6,80,000
8,16,000 3,08,000 |
| Total | 78,76,000 | 70,04,000 | |
|
II. 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 Equivalents |
2 3
|
42,80,000 1,60,000
9,60,000 5,16,000 6,80,000 12,80,000 |
34,00,000 4,80,000
4,48,000 4,84,000 5,72,000 16,20,000 |
| Total | 78,76,000 | 70,04,000 | |
Notes to Accounts
| Note No |
Particulars | As On 31-3-2014 |
As On 31-3-2013 |
| 1 |
Reserve and Surplus |
12,00,000 |
8,00,000 |
|
2
|
Tangible Assets Machinery Less: Accumulated Depreciation |
50,80,000 (8,00,000) |
40,00,000 (6,00,000) |
|
3
|
Intangible Assets Goodwill |
1,60,000 |
4,80,000 |
Additional information
During the year a piece of machinery, costing Rs 96,000 on which accumulated depreciation was Rs 64,000 was sold for Rs 24,000.
Prepare Cash Flow Statement
When does the flow of cash take place'?
Under which type of activity will you classify ‘Proceeds from Sale of Building’ while preparing Cash Flow statement?
Anand Ltd., arrived at a net income of Rs 5,00,000 for the year ended March 31, 2017. Depreciation for the year was Rs 2,00,000. There was a profit of Rs 50,000 on assets sold which was transferred to Statement of profit and Loss account. Trade Receivables increased during the year Rs 40,000 and Trade Payables also increased by Rs 60,000. Compute the cash flow operating activities by the indirect approach.
From the following Balance Sheets of Tiger Super Steel Ltd., prepare Cash Flow Statement:
Balance Sheet of Tiger Super Steel Ltd.
as at 31st March 2014 and 31st March 2017
| Particulars | Note No. | March 31, 2017 (Rs) |
March 31, 2016 (Rs) |
| I) Equity and Liabilities | |||
|
1. Shareholders’ Funds |
|||
|
a) Share capital |
1 | 1,40,000 | 1,20,000 |
|
b) Reserves and surplus |
2 | 22,800 | 15,200 |
|
2. Current Liabilities |
|||
|
a) Trade payables |
3 | 21,200 | 14,000 |
|
b) Other current liabilities |
4 | 2,400 | 3,200 |
|
c) Short-term provisions |
5 | 28,400 | 22,400 |
| Total | 2,14,800 | 1,74,800 | |
| II) Assets | |||
|
1. Non-Current Assets |
|||
|
a) Fixed assets |
|||
|
i) Tangible assets |
6 | 96,400 | 76,000 |
|
ii) Intangible assets |
18,800 | 24,000 | |
|
b) Non-current investments |
14,000 | 4,000 | |
|
2. Current Assets |
|||
|
a) Inventories |
31,200 | 34,000 | |
|
b) Trade receivables |
43,200 | 30,000 | |
|
c) Cash and Cash Equivalents |
11,200 | 6,800 | |
| Total | 2,14,800 | 1,74,800 |
Notes to accounts:
|
2017 |
2016 |
|
|
1. Share Capital |
||
|
Equity share capital |
1,20,000 |
80,000 |
|
10% Preference share capital |
20,000 |
40,000 |
|
1,40,000 |
1,20,000 |
|
|
2. Reserves and surplus |
||
|
General reserve |
12,000 |
8,000 |
|
Balance in statement of profit and loss |
10,800 |
7,200 |
|
22,800 |
15,200 |
|
|
3. Trade payables |
||
|
Bills payable |
21,200 |
14,000 |
|
4. Other current liabilities |
||
|
Outstanding expenses |
2,400 |
3,200 |
|
5. Short-term provisions |
||
|
Provision for taxation |
12,800 |
11,200 |
|
Proposed dividend |
15,600 |
11,200 |
|
28,400 |
22,400 |
|
|
6. Tangible assets |
||
|
Land and building |
20,000 |
40,000 |
|
Plant |
76,400 |
36,000 |
|
96,400 |
76,000 |
Additional Information:
Depreciation Charge on Land & Building Rs 20,000, and Plant Rs 10,000 during the year.
From the following Balance Sheet of Yogeta Ltd., prepare cash flow statement:
| Particulars | Note No. | 31st March 2017 (Rs) |
31st March 2016 (Rs) |
| I) Equity and Liabilities | |||
|
1. Shareholders’ Funds |
|||
|
a) Share capital |
1 | 4,00,000 | 2,00,000 |
|
b) Reserves and surplus-Surplus |
2,00,000 | 1,00,000 | |
|
2. Non-current Liabilities |
|||
|
a) Long-term borrowings |
2 | 1,50,000 | 2,20,000 |
|
3. Current Liabilities |
|||
|
a) Short-term borrowings |
1,00,000 | - | |
|
(Bank overdraft) |
|||
|
b) Trade payables |
70,000 | 50,000 | |
|
c) Short-term provision |
50,000 | 30,000 | |
|
(Provision for taxation) |
|||
| Total | 9,70,000 | 6,00,000 | |
| II) Assets | |||
|
1. Non-current assets |
|||
|
a) Fixed assets |
|||
|
i) Tangible |
7,00,000 | 4,00,000 | |
|
2. Current assets |
|||
|
a) Inventories |
1,70,000 | 1,00,000 | |
|
b) Trade Receivables |
1,00,000 | 50,000 | |
|
c) Cash and cash equivalents |
- | 50,000 | |
| Total | 9,70,000 | 6,00,000 |
Notes to Accounts -
| Particulars | 31st March 2017 (Rs) |
31st March 2016 (Rs) |
| 1. Share capital | ||
|
a) Equity share capital |
3,00,000 | 2,00,000 |
|
b) Preference share capital |
1,00,000 | - |
| 4,00,000 | 2,00,000 | |
| 2. Long term borrowings | ||
|
Long-term loan |
- | 2,00,000 |
|
Long-term Rahul |
1,50,000 | 20,000 |
| 1,50,000 | 2,20,000 |
Additional Information:
Net Profit for the year after charging Rs. 50,000 as Depreciation was Rs. 1,50,000. Dividend paid on Share was Rs. 50,000, Tax Provision created during the year amounted to Rs. 60,000. 8% loan was repaid on March 31, 2017 and an additional 9% loan of Rs. 1,30,000 was obtained from Rahul on April 01, 2016.
Answer the following question:
State giving reason, whether the issue of shares for consideration other than cash will result into inflow, outflow or no flow of cash.
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)
Which item comes under Financial Activities in the Cash Flow statement?
Gain on sale of tangible current assets is a/an:
Which of the following transactions will not result in flow of cash:
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.
