12th | Cash Flow Statement | Question No. 9 To 12 | Ts Grewal Solution 2022-2023

Question 9:

From the following information, calculate Net Profit before Tax and Extraordinary Items:

	`
Surplus, i.e., Balance in Statement of Profit and Loss (Opening)	1,00,000
Surplus, i.e., Balance in Statement of Profit and Loss (Closing)	3,36,000
Dividend paid in the current year	72,000
Interim Dividend Paid during the year	90,000
Transfer to Reserve	1,00,000
Provision for Tax for the current year	1,50,000
Refund of Tax	3,000
Loss due to Earthquake	2,00,000
Insurance Proceeds from Earthquake disaster settlement	1,00,000

Answer:

Cash Flow Statement for the year ended…
	Particulars	Amount (`)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (3,36,000 − 1,00,000)	2,36,000
	Add: Transfer to Reserve	1,00,000
	Proposed Dividend	72,000
	Interim Dividend	90,000
	Provision for Tax	1,50,000
	Extraordinary Items (Loss due to Earthquake)	2,00,000
	Less: Extraordinary Items (Insurance Proceeds from Earthquake disaster settlement )	(1,00,000)
	Refund of Tax	(3,000)
	Net Profit before Tax and Extraordinary Items	7,45,000

Question 10:

From the following information, calculate Operating Profit before Working Capital Changes:

	`
Net Profit before Tax and Extraordinary Items	4,47,000
Depreciation on Machinery	84,000
Interest on Borrowings	16,800
Goodwill Amortised	18,600
Loss on Sale of Furniture	18,000
Premium on Redemption of Preference Shares	6,000
Gain (Profit) on Sale of Investments	12,000
Interest and Dividend Received on Investments	27,600

Answer:

		Cash Flow Statement for the year ended March 31, ….
	Particulars		(`)	(`)
A	Cash Flow from Operating Activities
	Net Profit Before Taxation and Extraordinary Items			4,47,000
	Items to be Added:
	Depreciation on Machinery		84,000
	Loss on Sale of Furniture		18,000
	Interest on Borrowings		16,800
	Goodwill Amortized		18,600
				1,37,400
	Items to be Deducted:
	Profit on Sale of Investment		(12,000)
	Interest and Dividend Received on Investment		(27,600)	(39,600)
	Operating Profit before Working Capital Adjustments			5,44,800

Note: Assuming Premium on Redemption of Preference Shares has been paid out of the Securities Premium Reserve Balance.

Question 11:

From the following Balance Sheet of Double Tree Ltd. as at 31st March, 2022 and additional information, calculate Operating Profit before Working Capital Changes:

Particulars ulars	Note No.	31st March, 2022 (`)	31st March, 2021 (`)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		5,00,000	5,00,000
(b) Reserves and Surplus	1	6,70,000	5,00,000
2. Current Liabilities
(a) Trade Payables		60,000	50,000
(b) Other Current Liabilities (Outstanding Expenses)		20,000	15,000
(c) Short-term Provisions (Provision for Tax)		1,00,000	90,000
Total Total Expenses		13,50,000	11,55,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible)		7,50,000	7,30,000
(b) Non-Current Investments		2,50,000	3,00,000
2. Current Assets		3,50,000	1,25,000
Total		13,50,000	11,55,000

Notes to Accounts

Particulars	31st March, 2022 (`)	31st March, 2021 (`)
I. Reserve and Surplus
General Reserve	5,00,000	4,00,000
Surplus, i.e., Balance in Statement of Profit and Loss	1,70,000	1,00,000
	6,70,000	5,00,000

Additional Information: Depreciation for the year was `75,000.

Answer:

Computation of Operating Profit before Working Capital Changes for the year ended March 31, 2022
	Particulars		Amount (`)	Amount (`)
	Profit as per Statement of Profit and Loss (1,70,000 – 1,00,000)			70,000
	Transfer to General Reserve (5,00,000 – 4,00,000)			1,00,000
	Provision for Taxation (Current Year)			1,00,000
	Profit before Tax			2,70,000
	Items to be Added:
		Depreciation for the year		75,000
	Operating Profit before Working Capital Changes			3,45,000

Question 12:

Calculate Cash Flow from Operating Activities from the following details:

Particulars	31st March, 2022 (`)	31st March, 2021 (`)
Surplus, i.e., Balance in Statement of Profit and Loss	80,000	60,000
Trade Receivables	25,000	31,000
Provision for Depreciation	40,000	30,000
Inventories	80,000	60,000
Outstanding Rent	12,000	21,000
Goodwill	30,000	38,000
Prepaid Insurance	1,000	2,000
Trade Payables (Creditors)	13,000	19,000

Answer:

Particulars		(`)	(`)
Profit as per Statement of Profit and Loss (Net Income)			20,000
Items to be Added:
	Depreciation	10,000
	Goodwill written off	8,000	18,000
Operating Profit before Working Capital Changes			38,000
Add: Decrease in Current Assets
	Trade Receivables	6,000
	Prepaid Insurance	1,000
Less: Increase in Current Assets
	Inventories	(20,000)
Less: Decrease in Current Liabilities
	Outstanding Rent	(9,000)
	Trade Payables	(6,000)	(28,000)
Cash Generated from operations			10,000
Less: Tax Paid			Nil
Net Cash Flows from Operating Activities			10,000