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Question
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.
Solution
Cash Flow Statement
for the year ending March 31, 2015
|
|
Particulars |
Details (Rs) |
Amount (Rs) |
|
A. |
Cash from Operating Activities |
|
|
|
|
Net Profit |
|
2,20,000 |
|
|
Items to be Added: |
|
|
|
|
Interest on Debentures |
48,000 |
|
|
|
Depreciation on Fixed Assets |
80,000 |
|
|
|
Goodwill Written-off |
80,000 |
2,08,000 |
|
|
Operating Profit before Working Capital Adjustments |
|
4,28,000 |
|
|
Add: Increase in Current Liabilities |
|
|
|
|
Creditors |
3,00,000 |
|
|
|
Less: Increase in Current Assets |
|
|
|
|
Inventories |
(1,00,000) |
|
|
|
Trade Receivables |
(2,00,000) |
- |
|
|
Cash Generated from Operations |
|
4,28,000 |
|
|
Less: Tax Paid |
|
- |
|
|
Net Cash From Operating Activities |
|
4,28,000 |
|
B. |
Cash From Investing Activities |
|
|
|
|
Purchase of Fixed Assets (WN) |
(2,80,000) |
|
|
|
Net Cash From Investing Activities |
|
(2,80,000) |
|
C. |
Cash From Financing Activities |
|
|
|
|
Issue of Share Capital |
2,00,000 |
|
|
|
Redemption of Debentures |
(2,00,000) |
|
|
|
Interest Paid on Debentures |
(48,000) |
(48,000) |
|
|
Net Cash From Financing Activities (C) |
|
(48,000) |
|
|
Net Increase in Cash (A + B + C) |
|
1,00,000 |
|
|
Add: Opening Cash and Cash Equivalents |
|
3,00,000 |
|
|
Closing Cash and Cash Equivalents |
|
4,00,000 |
Working Note:
Fixed Assets Account
|
Dr. |
|
Cr. |
|||||
|
Particulars |
J.F. |
Amount (Rs) |
Particulars |
J.F. |
Amount (Rs) |
||
|
Balance b/d |
|
5,00,000 |
Depreciation |
|
80,000 |
||
|
Purchases (Balancing Figure) |
|
2,80,000 |
Balance c/d |
|
7,00,000 |
||
|
|
|
7,80,000 |
|
|
7,80,000 |
||
APPEARS IN
RELATED QUESTIONS
Give the meaning of ‘Cash Equivalents’ for the purpose of preparing Cash Flow Statement.
Does movement between items that constitute cash or cash equivalents result into cash flow? Give reason in support of your answer.
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
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
State the objective preparing ‘Cash Flow Statement’.
What is meant by a non-cash transaction? Give one example of a non-cash transaction.
What is meant by 'Cash Flow' while preparing Cash Flow Statement?
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
Long Answer Question
Describe the procedure to prepare Cash Flow Statement.
Long Answer Question
Describe"Indirect" method of ascertaining Cash Flow from Operating Activities.
Name the activities that constitute the primary or main activities of an enterprise?
As per which accounting standard, cash flows exclude movements between items that constitute cash or cash equivalents?
Cash Flow Statement is based upon ______.
Which item comes under Financial Activities in the Cash Flow statement?
Assertion (A): Buy-back of equity shares comes under financing activities.
Reason (R): Financing activities are the activities that result in a change in the size composition of the owner's capital and borrowing of the enterprise from other sources.
Which of the following is not a cash outflow?
Cash flow example from an Investing activity is:
