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 (`) |
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 |
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 |
|
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 |
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) |
|
|
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 |
|||
|
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