12th | Cash Flow Statement | Question No. 45 To 48 | Ts Grewal Solution 2023-2024

Question 45:

Following is the Balance sheet of X Ltd. as at 31st March, 2018;

BALANCE SHEET OF X LTD. as at 31st March, 2018

Particulars	Note No.	31st March, 2018 (`)	31st March, 2017 (`)
I. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Share Capital (b) Reserves and Surplus 2. Non-Current Liabilities Long-term Borrowings 3. Current Liabilities (a) Short-term Borrowings (b) Short-term Provisions	1 2 3 4	19,00,000 6,00,000 5,00,000 1,70,000 2,00,000	17,00,000 3,00,000 4,00,000 1,75,000 1,65,000
Total		33,70,000	27,40,000
ASSETS 1. Non-Current Assets (a) Fixed Assets: (i) Tangible Assets (ii) Intangible Assets (b) Non-current Investments 2. Current Assets (a) Current Investments (b) Inventories (c) Cash and Cash Equivalents	5 6	24,00,000 2,00,000 3,00,000 1,40,000 2,60,000 70,000	19,00,000 3,00,000 2,00,000 1,70,000 1,30,000 40,000
Total		33,70,000	27,40,000

Notes to Accounts

Particulars	31st March, 2018 (`)	31st March, 2017 (`)
Reserves and! Surplus Surplus, i.e., Balance in Statement of Profit and Loss	6,00,000	3,00,000
	6,00,000	3,00,000
2, Long-term Borrowings 12% Debentures	5,00,000	4,00,000
	5,00,000	4,00,000
3.Short-term Borrowings Bank Overdraft	1,70,000	1,75,000
	1,70,000	1,75,000
Å, Short-term Provisions Provision for Tax	2,00,000	1,65,000
	2,00,000	1,65,000
5. Tangible Assets Machinery Less: Accumulated Depreciation	26,00,000 (2,00,000)	20,00,000 (1,00,000)
	24,00,000	19,000,000
6. Intangible Assets Goodwill	2,00,000	3,00,000
	2,00,000	3,00,000

Additional Information:

(i) ` 1,00,000, 12% Debentures were issued on 1st April, 2017.

(ii) During the year, a piece of machinery costing ` 80,000 on which accumulated depreciation was ` 40,000 was sold at a gain of `10,000.

Prepare a Cash Flow Statement. (CBSE 2019C)

Answer:

Cash Flow Statement
Particulars	Detail	`
I. Cash flow from operating activities Net profit as per Statement of profit and loss (6,00,000-3,00,000) Add: Provision for Tax		3,00,000 2,00,000
Net profit before tax and extraordinary items Add: Depreciation on Machinery Goodwill amortised Interest on debentures	1,40,000 1,00,000 60,000	5,00,000 , 3,00,000
Less: Gain on Sale of machinery		8,00,000 (10,000)
Operating Profit Before Working Capital Changes Less: Inventories		7,90,000 (1,30,000)
Cash Generated from operation		6,60,000
Less: Tax paid		(1,65,000)
Cash flow from operating activities		4,95,000
II. Cash flow from Investing activities Proceeds From sale of Machinery Payments for the purchase of Machinery Payments for the purchase of Current Investment		50,000 (6,80,000) (1,00,000)
Cash Used in Investing activities		(7,30,000)
III. Cash flow from Financing activities Proceeds from Issue of Shares Proceeds from Issue of Debenture Decrease in Bank Overdraft Payment of Interest on Debenture		2,00,000 1,00,000 (5,000) (60,000)
Cash used in Financing activities		2,35,000
Net Decrease in Cash and cash equivalents Add: Opening Cash and Cash Equivalents		Nil 2,10,000
Closing Cash and Cash Equivalents		2,10,000

Working notes:

Dr.	Fixed Assets A/c		Cr.
Particulars	`	Particulars	`
To Balance B/d To P&L a/c (Gain on sale) To Bank a/c (Purchase)	20,00,000 40,000 6,80,000	By Provision for Dep. a/c By Bank a/c (sale) By Balance C/d	40,000 50,000 26,00,000
	26,90,000		26,90,000

Space

Dr.	Provision for Depreciation A/c		Cr.
Particulars	`	Particulars	`
To Machinery a/c To Balance C/d	40,000 2,00,000	By Balance B/d By P&L a/c (Dep. provided during the year)	1,00,000 1,40,000
	2,40,000		2,40,000

Question 46:

Following was the Balance Sheet of M.M. Ltd. as at 31st March, 2023:

Particulars	Note No.	31 march 2023(`)	31 march 2022(`)
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		31^st March 2023 (`)	31^st March 2022 (`)
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, 2023.
2. Tax ` 70,000 was paid during the year.
Prepare Cash Flow Statement.

Answer:

		Cash Flow Statement for the year ended 31^st March, 2023
	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 47:

From the following Balance Sheet of Gopal Ltd. and the additional information as at 31st March. 2019.

Prepare a Cash Flow Statement when Cash Flows from Financing Activities is ` 2,32,000;

Particulars	Note No.	31st March, 2019 (`)	31st March, 2018 (`)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		10,00,000	8,00,000
(b) Reserves and Surplus	1	4,00,000	(1,00,000)
2. Non-Current Liabilities
Long-term Borrowings	2	9,00,000	9,00,000
3. Current Liabilities
(a Short-term Borrowings	3	2,40,000	1,00,000
(b) Short-term Provisions	4	2,00,000	1,75,000
Total		27,40,000	18,75,000

Il. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment (Fixed Assets):
(i) Tangible Assets	5	20,00,000	14,42,000
(ii) Intangible Assets	6	46,000	58,000
(b) Non-current Investments		1,00,000	45,000
2. Current Assets
(a) Current Investments		2,00,000	1,20,000
(b) Inventories	7	2,14,000	90,000
(c) Cash and Cash Equivalents		1,80,000	1,20,000
Total		27,40,000	18,75,000

Notes to Accounts

Particulars	31st March, 2019 (`)	31st March, 2018 (`)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	4,00,000	(1,00,000)
2. Long-term Borrowings
12% Debentures	9,00,000	9,00,000
3. Short-term Borrowings
Bank Overdraft	240,000	1,00,000
4. Short-term Provisions
Provision for Tax	2,00,000	1,75,000
5. Tangible Assets
Machinery	24,00,000	16,42,000
Less: Accumulated Depreciation	(4,00,000)	(2,00,000)
	20,00,000	14,42,000
6. Intangible Assets
Goodwill	46,000	58,000
7. Inventories
Stock-in-Trade	2,14,000	90,000

Additional Information: Tax ` 1,50,000 was paid during the year. (CBSE 2020).

Answer:

Sheet of Gopal Ltd Cash Flow Statement as at 31st March. 2019
Particulars		Detail	`
I. Cash Flow From Operating Activity
Surplus, i.e., Balance in Statement of Profit and Loss			5,00,000
Add:	Provision for Tax		1,75,000

Add:	Depreciation on machinery	2,00,000
	Goodwill Amortised	12,000
	Interest on Debenture	1,08,000	3,20,000
Operating Profit Before Working Capital Changes			9,95,000
Add:	Increase in Liabilities and Decrease in Assets
	Inventories		1,24,000
Cash Generated From Operation			8,71,000
Less:	Tax Paid		1,50,000
Cash Flow From Operating Activity			7,21,000

II.	Cash Flow From Investing Activity
	Payment for purchase of Machinery		(7,58,000)
	Payment for purchase of Investing		(55,000)
Cash Flow From Investing Activity			(8,13,000)

III.	Cash Flow From Financing Activity
	Issue of shares	2,00,000
	Increase in Bank Over draft	1,40,000	3,40,000
	Payment of Interest on Debenture		(1,08,000)
Cash Flow From Financing Activity			2,32,000
IV.	Net increase in Cash and Cash Equivalents		1,40,000
	(7,21,000+(8,13,000)+2,32,000)
Add:	Opening Cash and Cash Equivalents		2,40,000
	Closing Cash and Cash Equivalents		3,80,000

Working Notes:

Dr.	Provision for Tax A/c		Cr.
Particulars	`	Particulars	`
To Bank A/c To Balance C/d	1,50,000 2,00,000	By Balance B/d By P&L a/c (Tax provided during the year)	1,75,000 1,75,000
	3,50,000		3,50,000

Question 48:

From the following Balance Sheet of JY Ltd. as at 31st March 2017, prepare a Cash Flow Statement:

BALANCE SHEET as at 31st March, 2017
Particular	Note No.	31st March, 2017 (₹)	31st March, 2016 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		5,00,000	5,00,000
(b) Reserves and Surplus	1	1,00,000	(25,000)
2. Non-Current Liabilities
Long-term Borrowings	2	2,50,000	1,50,000
3. Current Liabilities
(a) Short-term Borrowings	3	1,50,000	1,10,000
(b) Short-term Provisions	4	1,25,000	75,000
Total		11,25,000	8,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets Tangible	5	6,00,000	4,50,000
2. Current Assets
(a) Trade Receivables		2,75,000	2,25,000
(b) Cash and Cash Equivalents		50,000	25,000
(c) Short-term Loans and Advances		2,00,000	1,00,000
Total		11,25,000	8,00,000

Notes to Accounts

Particular		31^st March, 2017 (₹)	31^st March, 2016 (₹)
1.	Reserves and Surplus
	Surplus, i.e., Balance in Statement of Profit and Loss	1,00,000	(25,000)
		1,00,000	(25,000)
2.	Long-term Borrowings
	10% Debentures	2,50,000	1,50,000
		2,50,000	1,50,000
3.	Short-term Borrowings
	Bank Overdraft	1,50,000	1,00,000
		1,50,000	1,00,000
4.	Short-term Provisions
	Provision for Tax	1,25,000	75,000
		1,25,000	75,000
5.	Tangible Assets
	Machinery	7,37,500	5,25,000
	Accumulated Depreciation	(1,37,500)	(75,000)
		6,00,000	4,50,000

Note: Proposed Dividend for the years ended 31st March, 2016 and 2017 are `. 50,000 and `. 75,000 respectively.

Additional Information: `. 1,00,000, 10% Debentures were issued on 31st March, 2017.

Answer:

Cash flow Statement
for the year ended 31^st March, 2017
Particulars	Amount (`)	Amount (`)
A. Cash Flow from Operating Activities
Closing Balance of Surplus i.e. Statement of Profit and Loss	1,00,000
Less: Opening Balance of Surplus i.e. Statement of Profit and Loss	(25,000)
	1,25,000
Add: Provision for Tax made	1,25,000
Proposed Dividend paid as on 31^st March, 2016	50,000
Net Profit before tax and extraordinary items	3,00,000
Add: Depreciation charged during the year	62,500
Interest paid on 10% debentures	15,000
Net Profit before Working Capital changes	3,77,500
Less: Increase in Trade Receivables	(50,000)
Net Profit before tax	3,27,500
Less: Tax Paid during the year	75,000
Cash flow from Operating Activities		2,52,500
B. Cash flow from Investing Activities
Purchase of Machinery	(2,12,500)
Short term loans and advances given	(1,00,000)
Cash used in Investing Activities		(3,12,500)
C. Cash flow from Financing activities
Proceeds from issue of 10% debentures	1,00,000
Increase in the Bank Overdraft	50,000
Interest paid on debentures	(15,000)
Proposed Dividend paid	(50,000)
Cash flow from financing activities		85,000
Net Increase in Cash and Cash Equivalents		25,000
Add: Cash and Cash Equivalents at the beginning of the year		25,000
Cash and Cash Equivalents at the end of the year		50,000