Question 45:
Following
was the Balance Sheet of M.M. Ltd. as at 31st March, 2025:
|
Particulars |
Note
No. |
31
march 2025(₹) |
31
march 2024(₹) |
|
I. EQUITY AND LIABILITIES |
|
|
|
|
1. Shareholders' Funds |
|
|
|
|
(a)
Share Capital |
|
5,00,000 |
4,00,000 |
|
(b)
Reserves and Surplus |
1 |
2,00,000 |
(50,000) |
|
2. Non-Current Liabilities |
|
|
|
|
Long-term
Borrowings |
2 |
4,50,000 |
5,00,000 |
|
3. Current Liabilities |
|
|
|
|
(a)
Short-term Borrowings |
3 |
1,50,000 |
50,000 |
|
(b)
Short-term Provisions |
4 |
70,000 |
90,000 |
|
Total |
|
13,70,000 |
9,90,000 |
|
II. ASSETS |
|
|
|
|
1. Non-Current Assets |
|
|
|
|
(a) Fixed
Assets: |
|
|
|
|
(i) Tangible Assets |
5 |
10,03,000 |
7,20,000 |
|
(ii)
Intangible Assets |
6 |
20,000 |
30,000 |
|
(b)
Non-Current Investments |
|
1,00,000 |
75,000 |
|
2. Current Assets |
|
|
|
|
(a)
Current Investments |
|
50,000 |
60,000 |
|
(b)
Inventories |
7 |
1,07,000 |
45,000 |
|
(c) Cash
and Cash Equivalents |
|
90,000 |
60,000 |
|
Total |
|
13,70,000 |
9,90,000 |
|
|
|
|
|
Notes to Accounts
|
Particular |
31st March 2025 (₹) |
31st March 2024 (₹) |
|
|
1. |
Reserves and Surplus |
|
|
|
|
Surplus,
i.e., Balance in Statement of Profit and Loss |
2,00,000 |
(50,000) |
|
|
|
2,00,000 |
(50,000) |
|
2. |
Long-term
Borrowings |
|
|
|
|
12% Debentures |
4,50,000 |
5,00,000 |
|
|
|
4,50,000 |
5,00,000 |
|
3. |
Short-term Borrowings |
|
|
|
|
Bank
Overdraft |
1,50,000 |
50,000 |
|
|
|
1,50,000 |
50,000 |
|
4. |
Short-term Provisions |
|
|
|
|
Provision
for Tax |
70,000 |
90,000 |
|
|
|
70,000 |
90,000 |
|
5. |
Tangible Assets |
|
|
|
|
Machinery |
12,03,000 |
8,21,000 |
|
|
Less: Accumulated Depreciation |
(2,00,000) |
(1,01,000) |
|
|
|
10,03,000 |
7,20,000 |
|
6. |
Intangible Assets |
|
|
|
|
Goodwill |
20,000 |
30,000 |
|
|
|
20,000 |
30,000 |
|
7. |
Inventories |
|
|
|
|
Stock-in-Trade |
1,07,000 |
45,000 |
|
|
|
1,07,000 |
45,000 |
|
|
|
|
|
Additional Information:
1. 12% Debentures were redeemed on 31st March, 2025.
2. Tax ₹
70,000 was paid during the year.
Prepare Cash Flow Statement.
Answer:
|
|
Cash Flow
Statement for the year ended 31st March, 2025 |
||||
|
|
Particulars |
(₹) |
(₹) |
||
|
I |
Cash Flow from Operating Activities |
|
|
||
|
|
A. Net Profit before Tax and Extraordinary items* |
|
2,50,000 |
||
|
|
Adjustments
for Non-cash and Non-operating items |
|
|
||
|
|
B.Add: Items to be Added |
|
|
||
|
|
Depreciation |
99,000 |
|
||
|
|
Intangible Assets Written off |
10,000 |
|
||
|
|
Interest on Debentures (12% of 5,00,000) |
60,000 |
|
||
|
|
Provision for Tax |
50,000 |
2,19,000 |
||
|
|
C.Less: Items to be Deducted |
|
|
||
|
|
|
|
|
||
|
|
D. Operating Profit before Working Capital
Adjustments (A + B – C) |
|
4,69,000 |
||
|
|
E. Add:
Decrease in Current Assets and Increase in Current Liabilities |
|
|
||
|
|
F.
Less: Increase in Current Assets and Decrease in Current Liabilities |
|
|
||
|
|
Inventories |
62,000 |
(62,000) |
||
|
|
Cash Generated
from Operations (D + E – F) |
|
4,07,000 |
||
|
|
Less: Income Tax Paid (Net of Refund) |
70,000 |
(70,000) |
||
|
|
Net Cash Flows from
(or used in) Operating Activities |
|
3,37,000 |
||
|
|
|
|
|
|
|
|
II |
Cash Flow from Investing Activities |
|
|
||
|
|
Purchase of Fixed Assets (12,03,000 – 8,21,000) |
(3,82,000) |
|
||
|
|
Purchase of Non-Current Investments |
(25,000) |
|
||
|
|
Net Cash Flows from
(or used in) Investing Activities |
|
(4,07,000) |
||
|
|
|
|
|
||
|
III |
Cash Flow from Financing Activities |
|
|
||
|
|
Proceeds from Issue of Share Capital |
1,00,000 |
|
||
|
|
Redemption of Debentures |
(50,000) |
|
||
|
|
Interest Paid on Debentures |
(60,000) |
|
||
|
|
Increase in Bank Overdraft |
1,00,000 |
|
||
|
|
Net Cash Flow from
Financing Activities |
|
90,000 |
||
|
|
|
|
|
|
|
|
IV |
Net Increase or Decrease in Cash and Cash
Equivalents (I + II + III) |
|
20,000 |
||
|
|
|
Add: Cash
and Cash Equivalent in the beginning of the period |
|
1,20,000 |
|
|
|
|
(Includes Current Investments of ₹ 60,000) |
|
|
|
|
|
Cash and Cash Equivalents at the end of the period |
|
1,40,000 |
||
|
|
(Includes Current Investments of ₹ 50,000) |
|
|
||
|
|
|
|
|
|
|
|
Provision for Tax Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Bank
A/c |
70,000 |
Balance
b/d |
90,000 |
|
Balance
c/d |
70,000 |
Statement
of Profit and Loss |
50,000 |
|
|
1,40,000 |
|
1,40,000 |
|
|
|
|
|
Question
46:
Property,
Plant and Equipment (Net): Closing ₹31,75,000,
Opening ₹25,50,000. During the year, a machine costing ₹3,50,000 (Depreciation provided thereon ₹1,50,000) was
sold for ₹1,25,000. Depreciation charged for the year was ₹3,50,000. A machine costing ₹75,000 was purchased by
issue of equity shares of ₹10 each at a premium of 20%. Net profit before
tax ₹2,50,000.
How
will you disclose these items while preparing Cash Flow Statement?
Answer:
|
I. |
Operating
Activities |
|
|
|
Net profit before tax |
2,50,000 |
|
|
Add: |
|
|
|
Loss on Sale of Machine |
75,000 |
|
|
Depreciation |
3,50,000 |
|
|
Cash
Flow From Operating Activities |
6,75,000 |
|
|
|
|
|
II. |
Investing
Activities |
|
|
|
Purchases of Machine |
11,00,000 |
|
|
Sale of Machine |
(1,25,000) |
|
|
Cash
used in Investing Activities |
9,75,000 |
|
Machine
A/c |
|||
|
Particulars |
₹ |
Particulars |
₹ |
|
To Balance B/d |
25,50,000 |
By Bank A/c (Sales) |
1,25,000 |
|
To Equity Share Capital A/c (6,250×10) |
62,500 |
By Statement P&L A/c (Loss) (3,50,000-1,50,000-1,25,000) |
75,000
|
|
To S.P.R.
A/c (6,250×2) |
12,500 |
By Depreciation A/c |
3,50,000 |
|
To Bank A/c (Purchase- bal. Figure) |
11,00,000 |
|
31,75,000 |
|
|
37,25,000 |
|
37,25,000 |
|
Provision
for Depreciation A/c |
|||
|
Particulars |
₹ |
Particulars |
₹ |
|
To Machine A/c |
1,00,000 |
By Balance B/d |
4,00,000 |
|
To Balance c/d |
6,50,000 |
By Depreciation A/c |
3,50,000 |
|
|
7,50,000 |
|
7,50,000 |
Question 47:
From
the following Balance Sheet of Mishi Ltd. as at 31st
March, 2025, prepare Cash Flow Statement:
|
Particulars |
Note No. |
31st March, 2025 (₹) |
31st March, 2024 (₹) |
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
1.
Shareholders' Funds |
|
|
|
|
(a) Share Capital |
|
16,00,000 |
12,00,000 |
|
(b) Reserves and Surplus |
1 |
6,60,000 |
4,40,000 |
|
2.
Non-Current Liabilities |
|
|
|
|
Long-term Borrowings (10%
Debentures) |
|
3,20,000 |
2,00,000 |
|
3.
Current Liabilities |
|
|
|
|
(a) Short-term Borrowing (Bank
Loan) |
|
80,000 |
1,10,000 |
|
(b) Trade Payables |
|
1,50,000 |
1,80,000 |
|
Total |
|
28,10,000 |
21,30,000 |
|
II.
ASSETS |
|
|
|
|
1.
Non-Current Assets |
|
|
|
|
(a) Fixed
Assets−Tangible |
2 |
19,00,000 |
12,10,000 |
|
(b) Non-Current Investments |
|
2,70,000 |
2,00,000 |
|
2.
Current Assets |
|
|
|
|
(a) Current Investments |
|
1,60,000 |
80,000 |
|
(b) Trade Receivables |
|
1,80,000 |
4,00,000 |
|
(c) Cash and Cash
Equivalents |
3 |
3,00,000 |
2,40,000 |
|
Total |
|
28,10,000 |
21,30,000 |
|
|
|
|
|
|
Notes
to Accounts : |
||
|
Particulars |
31st March, 2025 (₹) |
31st March, 2024 (₹) |
|
1.
Reserves and Surplus : |
|
|
|
Securities Premium Reserve |
20,000 |
... |
|
General Reserve |
3,00,000 |
2,40,000 |
|
Surplus i.e., Balance in the Statement of
Profit and Loss |
3,40,000 |
2,00,000 |
|
|
6,60,000 |
4,40,000 |
|
2.
Fixed Assets−Tangible |
|
|
|
Machinery (Cost) |
21,40,000 |
14,00,000 |
|
Less:
Accumulated Depreciation |
2,40,000 |
1,90,000 |
|
|
19,00,000 |
12,10,000 |
|
|
|
|
|
3.
Cash and Cash Equivalents |
|
|
|
Cash in Hand |
1,40,000 |
1,10,000 |
|
Bank Balance |
1,60,000 |
1,30,000 |
|
|
3,00,000 |
2,40,000 |
|
|
|
|
Additional
Information:
(i) During the year, Machinery costing ₹1,40,000 (accumulated depreciation provided thereon ₹ 1,10,000) was sold for ₹ 20,000.
(ii) During the year, Non-current Investments costing ₹ 80,000 were sold
at a profit of ₹
16,000.
Answer:
|
|
Cash Flow
Statement for the year ended March 31, 2025 |
||||
|
|
Particulars |
Amount (₹) |
Amount (₹) |
||
|
A |
Cash Flow from Operating Activities |
|
|
||
|
|
Profit as per Statement of Profit and Loss |
1,40,000 |
|
||
|
|
General Reserve |
60,000 |
|
||
|
|
Profit Before Taxation |
|
2,00,000 |
||
|
|
Items to be Added: |
|
|
||
|
|
Depreciation |
1,60,000 |
|
||
|
|
Debentures Interest |
20,000 |
|
||
|
|
Loss on Sale of Fixed Assets |
10,000 |
|
||
|
|
Items to be Deducted: |
|
|
||
|
|
Profit on sale of Investment |
(16,000) |
1,74,000 |
||
|
|
Operating Profit before Working Capital Adjustments |
|
3,74,000 |
||
|
|
Less: Decrease in Current Liabilities |
|
|
||
|
|
Trade Payables |
(30,000) |
|
||
|
|
Add:Decrease in Current Assets |
|
|
||
|
|
Trade Receivables |
2,20,000 |
1,90,000 |
||
|
|
Cash Generated from Operations |
|
5,64,000 |
||
|
|
Less: Tax Paid |
|
- |
||
|
|
Net Cash Flows from Operating Activities |
|
5,64,000 |
||
|
|
|
|
|
|
|
|
B |
Cash Flow from Investing Activities |
|
|
||
|
|
|
Sale of Fixed Assets |
20,000 |
|
|
|
|
|
Sale of Non-Current Investment |
96,000 |
|
|
|
|
|
Purchase of Non-Current Investment |
(1,50,000) |
|
|
|
|
|
Purchase of Fixed Assets |
(8,80,000) |
|
|
|
|
Net Cash Used in Investing Activities |
|
(9,14,000) |
||
|
|
|
|
|
||
|
C |
Cash Flow from Financing Activities |
|
|
||
|
|
Proceeds
from Issue of Share Capital |
4,00,000 |
|
||
|
|
Proceeds
from Issue of issue of Debentures |
1,20,000 |
|
||
|
|
Security
Premium Reserve |
20,000 |
|
||
|
|
Repayment
of Bank Loan |
(30,000) |
|
||
|
|
Interest
Paid |
(20,000) |
|
||
|
|
Net Cash Flow from Financing Activities |
|
4,90,000 |
||
|
|
|
|
|
|
|
|
D |
Net Increase Decrease in Cash and Cash Equivalents |
|
1,40,000 |
||
|
|
|
Add: Cash
and Cash Equivalent in the beginning of the period (1,10,000+1,30,000+80,000) |
|
3,20,000 |
|
|
|
Cash and Cash Equivalents at the end of the period
(1,40,000+1,60,000+1,60,000) |
|
4,60,000 |
||
|
|
|
|
|
||
|
|
|
|
|
|
|
Working Notes:
WN1:
|
Fixed Assets Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Balance
b/d |
14,00,000 |
Bank
A/c (Sale) |
20,000 |
|
Bank
A/c (Purchase-
Bal. Fig.) |
8,80,000 |
Accumulated
Depreciation |
1,10,000 |
|
|
|
Profit
and Loss A/c (Loss
on Sale) |
10,000 |
|
|
|
Balance
c/d |
21,40,000 |
|
|
22,80,000 |
|
22,80,000 |
|
|
|
|
|
WN2:
|
Accumulated Depreciation Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Fixed
Assets A/c |
1,10,000 |
Balance
b/d |
1,90,000 |
|
Balance
c/d |
2,40,000 |
Profit
and Loss A/c (Dep. charged during the year- Bal. Fig.) |
1,60,000 |
|
|
3,50,000 |
|
3,50,000 |
|
|
|
|
|
WN3:
|
Non-Current Investment Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|
Balance
b/d |
2,00,000 |
Bank
A/c (Sale) (80,000+16,000) |
96,000 |
|
Profit
and Loss A/c (Profit on Sale) |
16,000 |
Balance
c/d |
2,70,000 |
|
Bank
A/c (Purchase- Bal. Fig.) |
1,50,000 |
|
|
|
|
|
|
|
|
|
3,66,000 |
|
3,66,000 |
|
|
|
|
|
Question 48:
Prepare
a Cash Flow Statement of Sea Ltd. from the following information:
|
BALANCE
SHEET as at 3 1st March, 2025 |
|||
|
Particulars |
|
31st March, 2025 |
31st March, 2024 |
|
I. EQUITY AND LIABILITIES |
|
|
|
|
Shareholders' Funds |
|
|
|
|
(a) Share Capital |
1 |
3,00,000 |
1,80,000 |
|
(b) Reserves and Surplus |
|
(72,000) |
30,000 |
|
Non-Current Liabilities |
|
|
|
|
Long-term Borrowings |
2 |
2,40,000
|
1,20,000 |
|
Current Liabilities |
|
|
|
|
(a) Trade Payables |
|
90,000
|
66,000 |
|
(b) Other Current Liabilities |
|
12,000
|
6,000 |
|
Total |
|
5,70,000 |
4,02,000 |
|
II. ASSETS |
|
|
|
|
Non-Current Assets |
|
|
|
|
(a) Property, Plant and Equipment and
Intangible Assets: |
|
|
|
|
-Property, Plant and Equipment |
|
3,60,000 |
2,40,000 |
|
(b) Non-Current Investments |
|
24,000 |
60,000 |
|
Current Assets |
|
|
|
|
(a) Inventories |
|
60,000
|
30,000 |
|
(b) Trade Receivables |
|
1,02,000
|
60,000 |
|
(c) Cash and Cash Equivalents |
|
24,000
|
12,000 |
|
Total |
|
5,70,000 |
4,02,000 |
Notes
to Accounts
|
Particulars |
31st
March, 2025 |
31st
March, 2024 |
|
Reserves and Surplus |
1,20,000
|
60,000 |
|
Reserve |
(1,92,000) |
(30,000) |
|
Surplus, ie.,
Balance in Statement of Profit & Loss |
(72,000) |
30,000 |
|
|
|
|
|
Long-term Borrowings |
|
|
|
9% Debentures |
2,40,000 |
1,20,000 |
|
|
2,40,000
|
1,20,000 |
Additional Information:
Included
in the Property, Plant and Equipment was a piece of Machine costing
₹36,000 on which depreciation charged was ₹12,000 and it was sold
for ₹12,000.
Depreciation
charged during the year was ₹60,000.
Answer:
|
Cash
Flow Statement at 31st March, 2025 |
||
|
Particulars |
₹ |
|
|
|
|
|
|
I. |
Operating Activities |
|
|
|
Net Loss
before Tax |
(1,02,000) |
|
|
Adjustments
for Non-Cash & Non-Operating Items: |
|
|
|
Add: Depreciation |
60,000 |
|
|
Add: Loss on sale of machine
(₹36,000 – ₹12,000 – ₹12,000 depreciation) |
12,000 |
|
|
Operating Loss before Working
Capital Changes |
(30,000) |
|
|
Adjustments for Working Capital
Changes: |
|
|
|
Increase in Trade Payables (90,000
– 66,000) |
24,000 |
|
|
Increase in Other Current
Liabilities (12,000 – 6,000) |
6,000 |
|
|
Increase in Inventories (60,000 –
30,000) |
(30,000) |
|
|
Increase in Trade Receivables
(1,02,000 – 60,000) |
(42,000) |
|
|
Cash Used in Operations |
(72,000) |
|
|
Net Cash Used in Operating
Activities |
(61,200) |
|
|
|
|
|
II. |
Investing Activities |
|
|
|
Purchase of Property, Plant &
Equipment = ₹3,60,000 –
₹2,40,000 + ₹36,000 (sold asset) |
(1,56,000) |
|
|
Sale of Machine |
12,000 |
|
|
Net Cash Used in Investing
Activities |
(1,56,000) |
|
|
|
|
|
III. |
Investing Activities |
|
|
|
Purchase of Property, Plant &
Equipment = ₹3,60,000 – ₹2,40,000 + ₹36,000 (sold asset) |
(1,56,000) |
|
|
Sale of Machine |
12,000 |
|
|
Net Cash Used in Investing
Activities |
(1,56,000) |
|
|
|
|
|
|
Financing Activities |
|
|
|
Issue of Share Capital (3,00,000 –
1,80,000) |
1,20,000 |
|
|
Issue of 9% Debentures (2,40,000 –
1,20,000) |
1,20,000 |
|
|
Net Cash Flow from Financing
Activities |
2,29,200 |
|
|
|
|
|
IIII. |
Net Cash
Increase in Cash and Cash Equivalent (I+II+III) |
12,000 |
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Ts Grewal Solution 2025-2026
Class 12 / Volume – 3
Chapter 5 – Cash Flow Statements