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Question
State whether the following transaction will result in inflow, outflow or no flow of cash while preparing cash flow statement:
Issued bonus shares ₹ 5,00,000.
Options
Inflow
Outflow
No flow
Solution
No flow
Issue of bonus shares does not result in any flow of cash.
RELATED QUESTIONS
Give the meaning of 'Cash Flow statement'.
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) Deposited Rs 43,000 into the bank.
(2) Withdrew cash from bank Rs 23,000.
(3) Sale of the machinery of the book value of Rs 38,000 at a loss of Rs 3,000.
(4) Converted Rs 2,00,000, 9% debentures into equity shares.
What is meant by 'Cash from Operating Activities'?
State any two advantages of preparing cash flow statement.
J.K. Ltd. purchased machinery on deferred payment basis. During the year ended 31.3.2016 the company paid in instalment of Rs 4,00,000 which included interest of Rs 40,000. While preparing cash flow statement, under which type of activities will this payment be classified? Also, mention the amount involved in each activity.
Give the meaning of ‘Cash Flow’.
Short Answer Question
What are the objectives of preparing cash flow statement?
Short Answer Question
Prepare a format of cash flow from operating activities under indirect method.
From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also, show the workings clearly preparing the ledger accounts:
Balance Sheet of Bharat Gas Ltd. as on 31 Mar. 2016 and 31 Mar. 2017
| Particulars | Note No. | Figures as the end of 2017 (Rs) |
Figures as at the end of reporting 2016 (Rs) |
| II) Assets | |||
|
1. Non-current Assets |
|||
|
a) Fixed assets |
|||
|
i) Tangible assets |
1 | 12,40,000 | 10,20,000 |
|
ii) Intangible assets |
2 | 4,60,000 | 3,80,000 |
|
b) Non-current investments |
3 | 3,60,000 | 2,60,000 |
Notes 1 tangible assets = Machinery
2 Intangible assets = Patents
Notes
| Figures of current year | Figures of previous year | |
| 1. Tangible Assets | ||
|
Machinery |
12,40,000 | 10,20,000 |
| 2. Intangible Assets | ||
|
Goodwill |
3,00,000 | 1,00,000 |
|
Patents |
1,60,000 | 2,80,000 |
| 4,60,000 | 3,80,000 | |
| 3. Non-current Investments | ||
|
10% long term investments |
1,60,000 | 60,000 |
|
Investment in land |
1,00,000 | 1,00,000 |
|
Shares of Amartex Ltd. |
1,00,000 | 1,00,000 |
| 3,60,000 | 2,60,000 | |
Additional Information:
(a) Patents were written-off to the extent of Rs. 40,000 and some Patents were sold at a profit of Rs. 20,000.
(b) A Machine costing Rs. 1,40,000 (Depreciation provided thereon Rs. 60,000) was sold for Rs. 50,000. Depreciation charged during the year was Rs. 1,40,000.
(c) On March 31, 2016, 10% Investments were purchased for Rs. 1,80,000 and some Investments were sold at a profit of Rs. 20,000. Interest on Investment was received on March 31, 2017.
(d) Amartax Ltd. paid Dividend @ 10% on its shares.
(e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs. 30,000.
Following is the Financial Statement of Garima 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 | 4,40,000 | 2,80,000 |
|
b) Reserve and surplus-Surplus |
2 | 40,000 | 28,000 |
|
2. Current Liabilities |
|||
|
a) Trade payables |
1,56,000 | 56,000 | |
|
c) Short-term provisions |
12,000 | 4,000 | |
|
(Provision for taxation) |
|||
| Total | 6,48,000 | 3,68,000 | |
| II) Assets | |||
|
1. Non-current assets |
|||
|
a) Fixed assets |
|||
|
i) Tangible |
3,64,000 | 2,00,000 | |
|
2. Current assets |
|||
|
a) Inventories |
1,60,000 | 60,000 | |
|
b) Trade receivables |
80,000 | 20,000 | |
|
c) Cash and cash equivalents |
28,000 | 80,000 | |
|
d) Other current assets |
16,000 | 8,000 | |
| Total | 6,48,000 | 3,68,000 | |
|
|
|
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 |
1,40,000 | 80,000 |
| 4,40,000 | 2,80,000 | |
| 2. Reserve and surplus | ||
|
Surplus in statement of profit and loss at the beginning of the year |
28,000 | |
|
Add: Profit of the year |
16,000 | |
|
Less: Dividend |
4,000 | |
| Profit at the end of the year | 40,000 |
Additional Information:
- Depreciation charged during the year Rs 32,000.
Name the activities which is related to long-term funds or capital of an enterprise?
What is the primary objective of cash flow statement?
Which of the following is not an investing cash flow?
Cash flow example from an operating activity is ______.
Dividend received by other than financial enterprise is shown in cash flow statement under ______.
In case of financial enterprises, the cash flow resulting from interest and dividend received and interest paid should be classified as cash flow from ______.
Gain on sale of tangible current assets is a/an:
Maturity period for a Short-term Investment from the date of its purchase to be considered as cash equivalents should be:
From the following information of Hoopla Ltd., you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2021 - 22.
| Particulars | (₹) | |
| (i) | Profit for the year 2021-22, before considering dividend and tax but after taking into account the following items: |
15,80,000 |
| (a) Depreciation on Property, Plant & Equipment | 5,50,000 | |
| (b) Interest Payable on Bank Loan | 3,80,000 | |
| (c) Profit on sale of investments, the book value of which was ₹ 2,20 000. |
1,00,000 | |
| (ii) | During the year 2021-22: | |
| (a) The company | ||
| • Paid Tax (which was provided in 2020 - 21) | 4,40,000 | |
| • Issued 66,000 equity shares of ₹ 10 each | 6,60,000 | |
| • Repaid Bank Loan | 15,00,000 | |
| • Paid interest on Bank Loan | 3,00,000 | |
| • Paid Dividend | 5,00,000 | |
| (b) Trade payables decreased by | 10,000 | |
| (c) Cash at bank increased from ₹ 60,000 on 1st April, 2021 to ₹ 7,00,000 on 31st March, 2022. |
