Question 29:
Calculate Cash Flow from Investing
Activities from the following information:
|
Particular |
31st
March, (`) |
31st
March, (`) |
|
Investment in Land |
3,00,000 |
3,00,000 |
|
Shares in Damodar Ltd. |
1,50,000 |
1,50,000 |
|
12% Long-term
Investments |
80,000 |
50,000 |
|
Plant and
Machinery |
7,50,000 |
6,00,000 |
|
Patents |
70,000 |
1,00,000 |
|
Goodwill |
1,50,000 |
1,00,000 |
Additional Information:
1. A piece of land was purchased as an investment out of surplus. It was let
out for commercial purpose and the rent received was ` 20,000.
2. Dividend received from Damodar Ltd. @ 12%.
3. Patents written off to the extent of `
20,000. Some patents were sold at a profit of `
10,000.
4. A machine costing `
80,000 (depreciation provided thereon `
30,000) was sold for `
35,000. Depreciation charged during the year was `
70,000.
5. During the year 12% investments were purchased for ` 1,00,000 and
some investments were sold at a profit of
` 10,000.
Interest on investments for the year was duly received.
Answer:
|
Cash Flow from Investing Activities |
|||
|
|
Particulars |
(`) |
(`) |
|
|
Purchase of Plant and Machinery |
(2,70,000) |
|
|
|
Purchase of Investment |
(1,00,000) |
|
|
|
Purchase of Goodwill |
(50,000) |
|
|
|
Rent Received |
20,000 |
|
|
|
Dividend Received (1,50,000 × 12%) |
18,000 |
|
|
|
Sale of Plant and Machinery |
35,000 |
|
|
|
Sale of Investment |
80,000 |
|
|
|
Interest on Investments |
6,000 |
|
|
|
Sale of Patents |
20,000 |
|
|
|
Net Cash Used in Investing Activities |
|
(2,41,000) |
Working Notes:
WN1 Computation of Interest on Investments
Interest on 12% Long-term Investments = 50,000×12/100=6,000
WN2
|
Patents Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(`) |
Particulars |
(`) |
|
Balance b/d |
1,00,000 |
Profit and Loss A/c (Written-off) |
20,000 |
|
Profit and Loss A/c (Profit on Sale) |
10,000 |
Bank A/c (Sale- Bal. Fig.) |
20,000 |
|
|
|
Balance c/d |
70,000 |
|
|
1,10,000 |
|
1,10,000 |
|
|
|
|
|
WN3
|
12% Long-Term Investments Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(`) |
Particulars |
(`) |
|
Balance b/d |
50,000 |
Bank A/c (Sale- Bal. Fig.) |
80,000 |
|
Bank A/c (Purchase) |
1,00,000 |
Balance c/d |
80,000 |
|
Profit and Loss A/c (Profit on Sale) |
10,000 |
|
|
|
|
1,60,000 |
|
1,60,000 |
|
|
|
|
|
WN3
|
Plant and Machinery Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(`) |
Particulars |
(`) |
|
Balance b/d |
6,00,000 |
Depreciation A/c |
70,000 |
|
Bank A/c (Purchase- Bal. Fig.) |
2,70,000 |
Bank A/c (Sale) |
35,000 |
|
|
|
Profit and Loss A/c (Loss on Sale) |
15,000 |
|
|
|
Balance c/d |
7,50,000 |
|
|
8,70,000 |
|
8,70,000 |
|
|
|
|
|
Cash Flow from Operating
Activities and Investing Activities
Question 30:
From the following information, calculate Cash Flow from Operating Activities and Investing Activities:
|
Particulars |
31st March, 2022
(`) |
31st March, 2023 (`) |
|
Surplus, i.e.,
Balance in Statement of Profit and Loss
Provision for Tax Trade Payables Current Assets
(Inventories and Trade Receivables) Fixed Assets (Net)
|
1,00,000 30,000 40,000
4,60,000 3,25,000 |
4,00,000 30,000 1,50,000 5,20,000 3,92,000 |
Additional Information:
1. Depreciation of ` 80,000 was provided and a machine costing ` 1,05,000 (Depreciation provided thereon ` 65,000) was sold at a loss of ` 8,000.
2. Tax paid during the year ` 30,000.
Answer:
|
Cash Flow Statement |
||
|
I.
Cash flow from operating activities (A) Net profit as per Statement of
profit and loss (4,00,000-1,00,000) Add: Provision of Tax |
|
3,00,000 30,000 |
|
Net profit before tax and extraordinary items Add: Depreciation on
Fixed assets Loss on sale of
Fixed Assets |
80,000 8,000 |
3,30,000 , 88,000 |
|
Operating Profit Before Working Capital Changes Add: Trade Payable |
|
4,18,000 1,10,000 |
|
|
|
5,28,000 |
|
Less: Current Assets
(5,20,000-4,60,000) |
1 |
60,000 |
|
Cash Generated from operation |
|
4,68,000 |
|
Less: Tax paid |
|
30,000 |
|
Cash flow from operating activities |
|
4,38,000 |
|
I.
Cash flow from Investing activities Proceeds
From Sale of Fixed Assets Payments
for the purchase of Fixed Assets |
|
32,000 (1,87,000) |
|
Cash Used in Investing activities |
|
1,55,000 |
Working notes:
|
Dr. |
Fixed Assets A/c |
Cr. |
|
|
Particulars |
` |
Particulars |
` |
|
To Balance B/d To Bank a/c (Purchase) |
3,25,000 1,87,000 |
By bank a/c (Sale) By P&L a/c (Loss) By Depreciation a/c By Balance C/d |
32,000 8,000 80,000 3,92,000 |
|
|
5,12,000 |
|
5,12,000 |
Space
|
Dr. |
Provision for Tax A/c |
Cr. |
|
|
Particulars |
` |
Particulars |
` |
|
To Bank a/c (Tax Paid) To Balance C/d |
30,000 30,000 |
By Balance B/d By P&L a/c (Tax Provided) |
30,000 30,000 |
|
|
1,30,000 |
|
1,30,000 |
Question 31:
From the following information,
calculation Cash Flow from Operating Activities and Investing Activities:
|
Particular |
31st,
March, 2022,
(`) |
31st,
March, 2023,
(`) |
|
Surplus, i.e., Balance in Statement of Profit and
Loss |
2,50,000 |
10,00,000 |
|
Provision for Tax |
75,000 |
75,000 |
|
Trade Payables |
1,00,000 |
3,75,000 |
|
Current Assets (Trade Receivables and Inventories) |
11,50,000 |
13,00,000 |
|
Fixed Assets (Tangible) |
21,25,000 |
23,30,000 |
|
Accumulated Depreciation |
10,62,500 |
11,00,000 |
Additional Information:
1. A machine having book value of ` 1,00,000
(Depreciation provided thereon ` 1,62,500) was sold
at a loss of ` 20,000.
2. Tax paid during the year
`
75,000.
Answer:
|
Cash
flow Statement |
||
|
for
the year ended 31st March, 2023 |
||
|
Particulars |
(`) |
(`) |
|
A. Cash Flow from Operating Activities |
|
|
|
Net Profit as per Statement of Profit & Loss |
7,50,000 |
|
|
Add: Provision for Tax made |
75,000 |
|
|
Net Profit before Tax and Extraordinary Items |
8,25,000 |
|
|
Add: Depreciation charged during the
year |
2,00,000 |
|
|
Add: Loss on Sale of Machine |
20,000 |
|
|
Net Profit before working Capital changes |
10,45,000 |
|
|
Add: Increase in Trade Payables |
2,75,000 |
|
|
Less: Increase in Current Assets |
(1,50,000) |
|
|
Net Profit before Tax |
11,70,000 |
|
|
Less: Tax Paid during the year |
75,000 |
|
|
Cash Flow from Operating Activities |
|
10,95,000 |
|
B. Cash flow from Investing Activities |
|
|
|
Purchase of Fixed Asset |
(4,67,500) |
|
|
Sale of Machine |
80,000 |
|
|
Cash used in Investing Activities |
|
3,87,500 |
|
Dr. |
Accumulated
Depreciation A/c |
Cr. |
|||||
|
Date |
Particulars |
(`) |
Date |
Particulars |
(`) |
||
|
2023 |
|
|
2018 |
|
|
||
|
March
31 |
To Fixed Asset A/c |
1,62,500 |
April
01 |
By Balance b/d |
10,62,500 |
||
|
March
31 |
To balance c/d |
11,00,000 |
|
By Statement of Profit & Loss A/c |
2,00,000 |
||
|
|
|
|
|
|
|
||
|
|
|
12,62,500 |
|
|
12,62,500 |
||
|
|
|
|
|
|
|
||
|
Dr. |
Fixed
Assets A/c |
Cr. |
|||||
|
Date |
Particulars |
(`) |
Date |
Particulars |
(`) |
||
|
2022 |
|
|
2019 |
|
|
||
|
April
01 |
To balance b/d |
21,25,000 |
March
31 |
By Accumulated Depreciation A/c |
1,62,500 |
||
|
2023 |
|
|
March
31 |
By Statement of Profit & Loss A/c- Loss |
20,000 |
||
|
|
|
|
March
31 |
By Bank A/c (1,00,000 – 20,000) |
80,000 |
||
|
March
31 |
To Cash/Bank A/c |
4,67,500 |
March
31 |
By balance c/d |
23,30,000 |
||
|
|
|
|
|
|
|
||
|
|
|
25,92,500 |
|
|
25,92,500 |
||
|
|
|
|
|
|
|
||
Cash Flow from Financing
Activities
Question 32:
From the following information,
calculate Cash Flow from Financing Activities:
|
|
1st
April, |
|
31st
March, (`) |
|
Long-term Loan |
2,00,000 |
|
2,50,000 |
During the year, the company repaid
a loan of `1,00,000.
Answer:
|
|
Cash Flow Statement |
|||
|
|
Particulars |
(`) |
(`) |
|
|
|
Cash Flow from Financing Activities |
|
|
|
|
|
Loan Repaid |
(1,00,000) |
|
|
|
|
New Loan Raised |
1,50,000 |
50,000 |
|
|
|
Cash
Flows from Financing Activity |
|
50,000 |
|
Working Notes:
|
Long
Term Loan Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(`) |
Particulars |
(`) |
|
Bank A/c (Repayment of Loan) |
1,00,000 |
Balance b/d |
2,00,000 |
|
Balance c/d |
2,50,000 |
Bank A/c (Loan Raised) |
1,50,000 |
|
|
3,50,000 |
|
3,50,000 |
|
|
|
|
|
Ts Grewal Solution 2023-2024
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Class 12 / Volume – II
Chapter 4 – Cash Flow Statement