Analysis of Financial Statements
Ts Grewal 2025-26 for Class 12 Commerce Accountancy
Chapter 5 - Cash Flow Statement
Question 1:
Identify
the transactions as belonging to (i) Operating
Activities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash and Cash Equivalents:
|
(a)
Cash Sale of Goods |
(b)
Cash Received against Revenue from Services rendered |
|
(c)
Cash Purchase of Goods |
(d)
Cash Paid against Services Taken |
|
(e)
Patents Purchased |
(f)
Marketable Securities |
|
(g)
Bank Overdraft |
(h)
Proceeds from Issue of Debentures |
|
(i) Purchase of Shares |
(j)
Repayment of Long-term Loan |
|
(k)
Commission Received |
(l)
Redemption of Debentures |
|
(m)
Interest on Debentures |
(n)
Interest on Investments |
|
(o)
Income Tax Paid |
(p)
Income Tax Paid on Gain of Sale of Asset |
|
(q)
Cash Received from Debtors |
(r)
Cash Paid to Creditors. |
Answer:
|
OPERATING ACTIVITY |
INVESTING ACTIVITY |
FINANCING ACTIVITY |
CASH AND CASH EQUIVALENTS |
|
a.
Cash Sale of Goods |
e.
Patents Purchased |
g.
Bank Overdraft |
f.
Marketable Securities |
|
b.
Cash Received against Revenue from Services rendered |
i.
Purchase of Shares |
h.
Proceeds from Issue of Debentures |
|
|
c.
Cash Purchase of Goods |
n.
Interest on Investments |
j.
Repayment of Long-term Loan |
|
|
d.
Cash paid against Services Taken |
p.
Income Tax paid on Gain on Sale of Asset |
l.
Redemption of Debentures |
|
|
k.
Commission Received |
|
m.
Interest on Debentures |
|
|
o.
Income Tax paid |
|
|
|
|
q.
Cash Received from Debtors |
|
|
|
|
r.
Cash Paid to Creditors |
|
|
|
Question 2:
Classify
the following transactions as Operating Activities for a financial company and
a non-financial company:
|
(a) Purchase of Shares on a Stock Exchange. |
(b) Dividend received on Shares. |
|
(c) Dividend paid on Shares. |
(d) Loans given. |
|
(e) Loans taken. |
(f) Interest paid on borrowings. |
Answer:
|
OPERATING ACTIVITY |
|
|
Financial
Company |
Non-Financial
Company |
|
a. Purchase of Shares on a Stock Exchange |
None |
|
b. Dividend received on shares |
None |
|
d. Loans given |
None |
|
e. Loans taken |
None |
|
f. Interest paid on borrowings |
None |
A financial company deals with securities like shares, bonds, debentures, etc
on a regular basis. These securities form part of their stock and hence
purchase and sale of these securities will be categorised
under Operating Activity. But, Dividend paid by them will be the part of
Financing Activities.
However, for a non-financial company issue of shares, debentures, etc form part
of financing activities as such issue will increase the capital employed in the
business.
Question 3:
State
which of the following would result in inflow/outflow or no flow of Cash and
Cash Equivalents:
(a) Sale of Fixed Assets, Book Value ₹
1,00,000 at a profit of ₹10,000.
(b) Sale of goods against cash.
(c) Purchase of machinery for cash.
(d) Purchase of Land and Building for ₹10,00,000.
Consideration paid by issue of debentures.
(e) Issued fully paid Bonus Shares.
(f) Cash withdrawn from bank.
(g) Payment of Interim Dividend.
Answer:
|
Inflow |
Outflow |
No
Flow |
|
a. Sale of
Fixed Assets |
c. Purchase
of Machinery for cash |
d. Purchase
of Land and Building. Consideration paid by issue of Debentures. |
|
b. Sale of
goods against cash |
g. Payment
of Interim Dividend |
e. Issued
fully paid bonus shares |
|
|
|
f. Cash
withdrawn from Bank |
Question 4:
For
each of the following transactions, calculate the resulting Cash Flow and state
the nature of Cash Flow, i.e., whether it is Operating, Investing or Financing:
(a) Acquired machinery for ₹2,50,000
paying 20% by cheque and executing a bond for the
balance payable.
(b) Paid ₹2,50,000
to acquire shares in Informa Tech Ltd. and received a
dividend of ₹50,000 after
acquisition.
(c) Sold machinery of original cost of ₹2,00,000 with an accumulated
depreciation of ₹1,60,000 for ₹60,000.
Answer:
(a)
Investing Activity: 50,000
(b) Investing Activity: 2,00,000
(c) Investing Activity: 60,000
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Ts Grewal Solution 2025-2026
Class 12 / Volume – 3
Chapter 5 – Cash Flow Statements