Question

From the following Balance Sheet as SRS Ltd and the additional information as in 31.3.2016, prepare a Cash Flow Statements :

Balance Sheet of SRS Ltd as at 31-3-2016
Particulars	Note No.	31-03-2016 Rs	31-03-2015 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	4,50,000 1,25,000   2,25,000   75,000 1,00,000	3,50,000 50,000   1,75,000   37,500 62,500
Total		9,75,000	6,75,000
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	5 6       7	7,32,500 50,000 75,000   20,000 61,000 36,500	4,52,500 75,000 50,000   35,000 36,000 26,500
Total		9,75,000	6,75,000

 

Note No	Particulars	31-3-2016 Rs	31-3-2015 Rs
1	Reserve and Surplus (Surplus i.e. Balance in Statement of Profit and Loss)	1,25,000	50,000
		1,25,000	50,000
2	Long term borrowings : 12 % Debentures	2,25,000	1,75,000
		2,25,000	1,75,000
3	Short-term borrowings : Bank Overdraft	75,000	37,500
		75,000	37,500
4	Short-term provisions Provisions for tax	1,00,000	62,500
		1,00,000	62,500
5	Tangible Assets Machinery Accumulated Depreciation	8,37,500 (1,05,000)	5,22,500 (70,000)
		7,32,500	4,52,500
6	Intangible Assets Goodwill	50,000	75,000
		50,000	75,000
7	Inventories Stock in trade	61,000	36,000
		61,000	36,000

Additional Information:

1) Rs 50,000, 12% debentures were issued on 31.3.2016

2) During the year a piece of machinery costing Rs40,000 on which accumulated depreciation was Rs 20,000 was sold at a loss of Rs 5,000.

Answer 1

	Particulars	Rs	Rs
1                             2         3             4	Cash Flow from Operating Activities Profit as per Profit and Loss Proposed Dividend           Profit Before Taxation Add: Items to be added Depreciation Goodwill Written off Interest on Debentures Loss on Sale of Machinery Less : Items to be Deducted   Operating Profit before Working Capital Adjustments Add: Decrease in Current Assets and Increase in Current Liabilities 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 Cash Flow from Investing Activities Purchase of Machinery Sale of Machinery Purchase of Non – Current Investments    Net Cash Flows (or used in) Investing Activities Cash Flow from Financing Activities Proceeds from Issue of Share Capital Interest on Debentures Issue of Debenture Increase in Bank Overdraft Payment of Dividend     Net Cash Flow from Financing Activities 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 Rs 35,000)   Cash and Cash Equivalents at the end of the period (Includes Current Investments of Rs 20,000)	75,000 1,00,000 1,75,000   55,000 25,000 21,000 5,000 - 2,81,000     (25,000) 2,56,000 -     (3,55,000 15,000 (25,000)     1,00,000 (21,000) 50,000 37,500 (62,500	2,56,000         (3,65,000)             1,04,000 (5,000)   61,500   56,500

 

Machinery Account
Dr.			Cr.
Particulars	Rs	Particulars	Rs
To Balance b/d     To Bank A/c –Purchase (Balancing Fig.)	5,22,50     3,55,000	By Bank A/c (Sale) By Acc. Depreciation A/c By Profit and Loss A/c (Loss)   By Balance c/d	15,000 20,000 5,000   8,37,500
	8,77,500		8,77,500

 

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs	Particulars	Rs
To Machinery A/c To Balance c/d	20,000 1,05,000	By Balance b/d By Depreciation A/c (Balancing Fig.)	70,000 55,000
	1,25,000		1,25,000