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12th | Cash Flow Statement | Question No. 41 To 44 | Ts Grewal Solution 2023-2024

Cash flow statements with Adjustments

 Question 41:  Balance Sheet of Varun Ltd as at 31st March, 2023 is as s follows:

Particulars

Note No.

31st March, 2023 (`)

31st March, 2022 (`)

I. EQUITY AND LIABILITIES

1. Shareholders’ Funds

(a) Share Capital

(b) Reserves and Surplus:

Surplus, i.e., Balance in Statement of Profit and Loss

2. Non-Current Liabilities

Long-term Borrowings

3. Current Liabilities

Trade Payables

 

 

 

2,00,000

 

 98,000

 

90,000

 

82,000

 

 

2,00,000

 

96,000

 

60,000

 

72000

Total

 

4,70,000

4,28,000

li. ASSETS

1. Non-Current Assets

Fixed Assets (Tangible)

2. Current Assets

(a) Inventories

(b) Trade Receivables

(c) Cash and Cash Equivalents

 

 

 

3,42,000

 

44,000

76,800

7,200

 

 

3,00,000

50,000

 

70,000

8,000

Total

 

4,70,000

428,000

 

Notes to Accounts

Particulars

 

 

31st March, 2023 (`)

31st March, 2022 (`)

  1. Long-term Borrowings

Loan from Z Ltd. 

Loan from Bank

 

 

 

40,000

50,000

 

------

 60,000

 

 

 

90,000

60,000

2. Fixed Assets (Tangible)

(i) Land

(ii) Building

(iii) Machinery

Less: Accumulated Depreciation

31-03-2022

 

 

2,44,000

72,000

31-03-2020

 

 

2,14,000

54,000

 

60,000 1,10,000

 

1,72,000

 

40,000

1,00,000

 

1,60,000

 

 

 

3,42,000

3,00,000

Additional Information: During the year ` 52, ,000 were paid as interim dividend.

Prepare Cash Flow Statement.

Answer:

Cash Flow Statement

 

Particulars

Detail

`

I.                   Cash  flow from operating activities

Net profit as per Statement of profit and loss

(98,000-96,000)

 Add:

Interim Dividend

 

 

 

 

52000

 

2,000

 

 

52000

Net profit before tax and extraordinary items

Add:

Depreciation on Machinery

 

54,000

,

18,000

Operating Profit Before Working Capital Changes

Add:

Trade Payable (82,000-72,000)

Inventories (50,000-44,000)

 

 

10,000

6,000

72,000

 

 

16000

 

 

88,000

Less:

Current Assets (76,800-70,000)

 

 

 

(6,800)

Cash Generated from operation

 

81,200

Less: Tax paid

 

--------

Cash flow from operating activities

 

81,200

 

II.                Cash  flow from Investing activities

Payments for the purchase of Land

Payments for the purchase of Building

Payments for the purchase of Machinery

 

 

 

(20,000)

(10,000)

(30,000)

Cash Used in Investing activities

 

(60,000)

III.             Cash flow from Financing activities

Proceeds from loan from Z Ltd.

Repayment of Bank loan

Payment of Interim dividend

 

 

(10,000)

(52,000)

 

40,000

 

(62,000)

Cash used in Financing activities

 

(22,000)

Net Decrease in Cash and cash equivalents

[81,200+(60,000)+ (22,000)]

Add: Opening Cash and Cash Equivalents

 

(800)

 

8,000

Closing Cash and Cash Equivalents

 

7,200

Working notes:

Dr.

Fixed Assets A/c

Cr.

Particulars

`

Particulars

`

To Balance B/d

To Bank a/c (Purchase)

2,14,000

40,000

By Balance C/d

2,44,000

 

5,12,000

 

5,12,000

Space

Dr.

Provision for Depreciation A/c

Cr.

Particulars

`

Particulars

`

To Balance C/d

72,000

By Balance B/d

By P&L a/c

(Dep. provided during the year)

54,000

18,000

 

 

72,000

 

72,000

 

 

 Question 42:

Following are the Balance Sheets of Solar Power Ltd. as at 31st March, 2023 and 2022:

Solar Power Ltd.

BALANCE SHEET

Particulars ulars

Note No.

31st March, 2023

(`)

31st March, 2022

(`)

I. EQUITY AND LIABILITIES

 

 

 

1. Shareholders' Funds

 

 

 

(a) Share Capital

 

24,00,000

22,00,000

(b) Reserves and Surplus

1

6,00,000

4,00,000

2. Non-Current Liabilities

 

 

 

Long-term Borrowings

 

4,80,000

3,40,000

3. Current Liabilities

 

 

 

(a) Trade Payables

 

3,58,000

4,08,000

(b) Short-term Provisions

 

1,00,000

1,54,000

Total      Total Expenses

 

39,38,000

35,02,000

II. ASSETS

 

 

 

1. Non-Current Assets

 

 

 

Fixed Assets:

 

 

 

(i) Tangible Assets

2

21,40,000

17,00,000

(ii) Intangible Assets

3

80,000

2,24,000

2. Current Assets

 

 

 

(a) Current Investments

 

4,80,000

3,00,000

(b) Inventories

 

2,58,000

2,42,000

(c) Trade Receivables

 

3,40,000

2,86,000

(d) Cash and Cash Equivalents

 

6,40,000

7,50,000

Total

 

39,38,000

35,02,000

 

 

 

 

 Notes to Accounts

 

Particulars ulars

31st March, 2023

(`)

31st March, 2022

(`)

1. Revenue and Surplus

Surplus, i.e., Balance in Statement of Profit and Loss

6,00,000

4,00,000

2. Tangible Assets

 

 

Machinery

25,40,000

20,00,000

Less: Accumulated Depreciation

(4,00,000)

(3,00,000)

      Total Expenses

21,40,000

17,00,000

3. Intangible Assets

 

 

Goodwill

80,000

2,24,000

 

 

 


Additional Information:
During the year, a piece of machinery costing 
`48,000 on which accumulated depreciation was  ` 32,000. was sold for  ` 12,000.
Prepare Cash Flow Statement.

Answer:

 

Cash Flow Statement 

for the year ended March 31, 2023

 

Particulars

Amount

(`)

Amount

(`)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

2,00,000

 

 

Profit Before Taxation

 

2,00,000

 

Items to be Added:

 

 

 

Amortisation of Goodwill

1,44,000

 

 

Depreciation

1,32,000

 

 

Loss on Sale of Fixed Assets

4,000

2,80,000

 

Operating Profit before Working Capital Adjustments

 

4,80,000

 

Less: Increase in Current Assets

 

 

 

 

Inventories 

16,000

 

 

 

Trade Receivables

54,000

 

 

Less: Decrease in Current Liabilities

 

 

 

 Trade Payables

50,000

 

 

Short-Term Provisions

54,000

1,74,000

 

Net Cash Generated from Operating Activities

 

3,06,000

 

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

 

Sale of Machinery

12,000

 

 

 

Purchase of Machinery

(5,88,000)

 

 

Net Cash Used in Investing Activities

 

(5,76,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

2,00,000

 

 

Proceeds from Long Term Borrowings

1,40,000

 

 

Net Cash Flow from Financing Activities

 

3,40,000

 

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

70,000

 

 

Add: Cash and Cash Equivalent in the beginning of the 

Period

 

10,50,000

 

Cash and Cash Equivalents at the end of the period

 

11,20,000

 

 

 

 

 Working Notes:

 Machinery Account

 

Dr.

Cr.

 

Particulars

 (`)

Particulars

 (`)

 

Balance b/d

20,00,000

Bank A/c (Sale)

12,000

 

Bank A/c (Purchase- Bal. Fig.)

5,88,000

Depreciation on Part of Machinery

32,000

 

 

 

Profit and Loss A/c

(Loss on Sale)

4,000

 

 

 

Balance c/d

25,40,000

 

 

25,88,000

 

25,88,000

 

 

 

 

 

 

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

 (`)

Particulars

 (`)

Machinery A/c

32,000

Balance b/d

3,00,000

Balance c/d

4,00,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

1,32,000

 

4,32,000

 

4,32,000

 

 

 

 

 

Question 43:

 

Following is the Balance Sheet of Fine Products Ltd. as at 31st March, 2023:
 

Particulars

Note No.

31st March, 2023

(`)

31st March, 2022

(`)

I. EQUITY AND LIABILITIES

 

 

 

1. Shareholders' Funds

 

 

 

(a) Share Capital: Equity Share Capital

 

3,50,000

3,00,000

(b) Reserves and Surplus

1

57,000

38,000

2. Current Liabilities

 

 

 

(a) Trade Payables

 

53,000

35,000

(b) Other Current Liabilities

 

6,000

8,000

(c) Short-term Provisions

2

32,000

28,000

Total

 

4,98,000

4,09,000

II. ASSETS

 

 

 

1. Non-Current Assets

 

 

 

(a) Fixed Assets:

 

 

 

(i) Tangible Assets

3

2,48,000

2,00,000

(ii) Intangible Assets (Goodwill)

 

40,000

50,000

(b) Non-Current Investments

 

35,000

10,000

2. Current Assets

 

 

 

(a) Inventories

 

39,000

57,000

(b) Trade Receivables

 

1,08,000

75,000

(c) Cash and Bank Balance

 

28,000

17,000

Total

 

4,98,000

4,09,000

 

 

 

 

Notes to Accounts

Particulars

31st March, 2023

(`)

31st March, 2022

(`)

1. Reserves and Surplus

 

 

General Reserve

30,000

20,000

Surplus, i.e., Balance in Statement of Profit and Loss

27,000

18,000

 

57,000

38,000

2. Short-term Provisions

 

 

Provision for Tax

32,000

28,000

3. Tangible Fixed Assets

 

 

Land and Building

57,000

1,10,000

Plant and Machinery

1,91,000

90,000

 

2,48,000

2,00,000

 

 

 

 

Note: Proposed dividends on equity for the years ended 31st March, 2022 and 2023 are ` 39,000 and ` 45,000 respectively.

You are required to prepare Cash Flow Statement for the year ended 31st March, 2023.

Answer:

Cash Flow Statement

for the year ended March 31, 2023

 

Particulars

 (`)

 (`)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

 

9,000

 

Items to be Added:

 

 

 

General Reserve

10,000

 

 

Goodwill

10,000

 

 

Provision for Taxation

32,000

 

 

Proposed Dividend

39,000

1,00,000

 

Operating Profit before Working Capital Adjustments

 

1,00,000

 

Less: Increase in Current Assets

 

 

 

 

Trade Receivables

(33,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Other Current Liabilities

(2,000)

 

 

Add: Decrease in Current Assets

 

 

 

Inventories

18,000

 

 

Add: Increase in Current Liabilities

 

 

 

  Trade Payables

18,000

1,000

 

Cash Generated from Operations

 

1,01,000

 

Less: Tax Paid

 

(28,000)

 

Net Cash Flows from Operating Activities

 

73,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Non-Current Investments

 

(25,000)

 

Purchase of Plant & Machinery

 

(1,01,000)

 

Sale of Land & Building

 

53,000

 

Net Cash Used in Investing Activities

 

(73,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Dividend Paid

 

(39,000)

 

Proceeds from Issue of Share Capital

 

50,000

 

Net Cash Flow from Financing Activities

 

11,000

D

Net Increase or Decrease in Cash and Cash Equivalents

 

11,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

17,000

 

Cash and Cash Equivalents at the end of the period

 

28,000

 

 

 

 


Note: Proposed Dividend treatment is as per AS-4 (Revised).

 

Question 44:

Following is the Balance Sheet of Mevanca Limited as at 31st March, 2017:

Mevanca Limited BALANCE SHEET
as at 31st March, 2017:

Particulars

Note No.

31st March, 2017

(₹)

31st March, 2016

(₹)

I. EQUITY AND LIABILITIES

1. Shareholders' Funds

(a) Share Capital

3,00,000

1,00,000

(b) Reserves and Surplus

1

25,000

1,20,000

2. Non-Current Liabilities

Long-term Borrowings

2

80,000

60,000

3. Current Liabilities

(a) Trade Payables

6,000

20,000

(b) Short-term Provisions

3

68,000

70,000

Total

4,79,000

3,70,000

II. ASSETS

1. Non-Current Assets

Fixed Assets

4

3,36,000

1,92,000

2. Current Assets

(a) Inventories

67,000

60,000

(b) Trade Receivables

51,000

65,000

(c) Cash and Cash Equivalents

25,000

49,000

(d) Other Current Assets

4,000

Total

4,79,000

3,70,000

 

Notes to Accounts

 

Particulars

31st March, 2017

(₹)

31st March, 2016

(₹)

1. Reserves and Surplus

Surplus, i.e., Balance in Statement of Profit and Loss

25,000

1,20,000

25,000

1,20,000

2. Long-term Borrowings

10% Long-term Loan

80,000

60,000

80,000

60,000

3. Short-term Provisions

Provision for Tax

68,000

70,000

68,000

70,000

4. Fixed Assets

Machinery

3,84,000

2,15,000

Accumulated Depreciation

(48,000)

(23,000)

3,36,000

1,92,000

Additional Information:
(i) Additional loan was taken on 1st July, 2016.
(ii) Tax of ₹ 53,000 was paid during the year.
Prepare Cash Flow Statement.

Answer:

Cash flow Statement 

for the year ended 31st March, 2017

Particulars

Amount
(
`)

Amount
(
`)

A. Cash Flow from Operating Activities

 

 

Net Loss as per Statement of Profit and Loss

(95,000)

 

Add: Provision for Tax made (WN1)

51,000

 

Net loss before Tax and Extraordinary Items

(44,000)

 

Add: Depreciation charged during the year

25,000

 

Interest paid on loan (WN2)

7,500

 

Net Loss before Working Capital Changes

(11,500)

 

Add: Decrease in Trade Receivables

14,000

 

Decrease in other Current Assets

4,000

 

Less: Decrease in Trade Payables

(14,000)

 

Increase In Inventories

(7,000)

 

Net Loss before Tax

(14,500)

 

Add: Tax to be paid during the year

(53,000)

 

Cash used in Operating Activities

 

(67,500)

B. Cash Flow from Investing Activities

 

 

Purchase of Machinery

(1,69,000)

 

Cash used in Investing Activities

 

(1,69,000)

C. Cash Flow from Financing Activities

 

 

Proceeds from Issue of Shares

2,00,000

 

Proceeds from additional loan taken

20,000

 

Interest paid on long-term loan

(7,500)

 

Cash flow from Financing Activities

 

2,12,500

Net decrease in Cash and Cash Equivalents

 

(24,000)

Add: Opening Balance of Cash and Cash Equivalent

 

49,000

Cash and Cash Equivalents at the end of the year

 

25,000

 

 

 


  Working Notes:

1.

Dr.

Provision for Tax A/c

Cr.

Date

Particulars

Amount

(`)

Date

Particulars

Amount

(`)

2017

 

 

2016

 

 

March 31

To Cash A/c- Tax Paid

53,000

April 01

By balance b/d

70,000

March 31

To balance c/d

68,000

2017

 

 

 

 

 

March 31

By Statement of Profit & Loss A/c

51,000

 

 

 

 

 

 

 

 

1,21,000

 

 

1,21,000

 

 

 

 

 

 


2. Interest on Loan
Interest on Loan taken on 1st July, 2016=  `. 20,000×10/100×9/12=  `. 1,500

Interest on Loan as on 31st March, 2016=  `. 60,000×10100=  `. 6,000

Total Interest Paid on Loan=  `. (6,000+1,500)=  `. 7,500

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – II

Chapter 4 – Cash Flow Statement

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