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12th | Cash Flow Statement | Question No. 29 To 32 | Ts Grewal Solution 2023-2024

Question 29:

Calculate Cash Flow from Investing Activities from the following information:
 

Particular

31st March,
2023

(`)

31st March,
2022

(`)

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
(Depreciation on Mach. Sold)

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
(Bal. Fig.)

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,
2022(
`)

 

31st March,
2023

(`)

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

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