Question 29:
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 30:
Calculate
Cash Flow from Investing Activities from the following information:
|
Particular |
31st March, (₹) |
31st March, (₹) |
|
Investment in Land |
3,00,000 |
3,00,000 |
|
Shares in Damodar Ltd. |
1,50,000 |
1,50,000 |
|
12% Long-term Investments |
80,000 |
50,000 |
|
Plant and Machinery |
7,50,000 |
6,00,000 |
|
Patents |
70,000 |
1,00,000 |
|
Goodwill |
1,50,000 |
1,00,000 |
Additional
Information:
1. A piece of land was purchased as an investment out of surplus. It was let
out for commercial purpose and the rent received was ₹ 20,000.
2. Dividend received from Damodar Ltd. @ 12%.
3. Patents written off to the extent of ₹ 20,000. Some patents were sold
at a profit of ₹ 10,000.
4. A machine costing ₹ 80,000 (depreciation provided thereon ₹
30,000) was sold for ₹ 35,000. Depreciation charged during the year was ₹
70,000.
5. During the year 12% investments were purchased for ₹ 1,00,000 and some
investments were sold at a profit of ₹ 10,000. Interest on investments
for the year was duly received.
Answer:
|
Cash Flow from Investing Activities |
|||
|
|
Particulars |
(₹) |
(₹) |
|
|
Purchase of Plant and Machinery |
(2,70,000) |
|
|
|
Purchase of Investment |
(1,00,000) |
|
|
|
Purchase of Goodwill |
(50,000) |
|
|
|
Rent Received |
20,000 |
|
|
|
Dividend Received (1,50,000 × 12%) |
18,000 |
|
|
|
Sale of Plant and Machinery |
35,000 |
|
|
|
Sale of Investment |
80,000 |
|
|
|
Interest on Investments |
6,000 |
|
|
|
Sale of Patents |
20,000 |
|
|
|
Net Cash Used in Investing Activities |
|
(2,41,000) |
Working Notes:
WN1Computation of Interest on Investments
Interest on 12% Long-term Investments = 50,000×12/100=6,000
WN2
|
Patents Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(₹) |
Particulars |
(₹) |
|
Balance b/d |
1,00,000 |
Profit and Loss A/c (Written-off) |
20,000 |
|
Profit and Loss A/c (Profit on Sale) |
10,000 |
Bank A/c (Sale- Bal. Fig.) |
20,000 |
|
|
|
Balance c/d |
70,000 |
|
|
1,10,000 |
|
1,10,000 |
|
|
|
|
|
WN3
|
12% Long-Term Investments Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(₹) |
Particulars |
(₹) |
|
Balance b/d |
50,000 |
Bank A/c (Sale- Bal. Fig.) |
80,000 |
|
Bank A/c (Purchase) |
1,00,000 |
Balance c/d |
80,000 |
|
Profit and Loss A/c (Profit on Sale) |
10,000 |
|
|
|
|
1,60,000 |
|
1,60,000 |
|
|
|
|
|
WN3
|
Plant and Machinery Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
(₹) |
Particulars |
(₹) |
|
Balance b/d |
6,00,000 |
Depreciation A/c |
70,000 |
|
Bank A/c (Purchase- Bal. Fig.) |
2,70,000 |
Bank A/c (Sale) |
35,000 |
|
|
|
Profit and Loss A/c (Loss on Sale) |
15,000 |
|
|
|
Balance c/d |
7,50,000 |
|
|
8,70,000 |
|
8,70,000 |
|
|
|
|
|
Cash Flow from Operating Activities and Investing Activities
Question 31:
From the following information, calculate Cash Flow from Operating Activities and Investing Activities:
|
Particulars |
31st March, 2026 (₹) |
31st March, 2025 (₹) |
|
Surplus, i.e., Balance in Statement of Profit and Loss Provision for Tax Trade Payables Current Assets (Inventories and Trade Receivables) Fixed Assets (Net) |
4,00,000 30,000 1,50,000 5,20,000 3,92,000 |
1,00,000 30,000 40,000 4,60,000 3,25,000 |
Additional Information:
1. Depreciation of ₹ 80,000 was provided and a machine costing ₹ 1,05,000 (Depreciation provided thereon ₹ 65,000) was sold at a loss of ₹ 8,000.
2. Tax paid during the year ₹ 30,000.
Answer:
|
Cash Flow Statement
|
||
|
I. Cash flow from operating activities Net profit as per Statement of profit and loss (4,00,000-1,00,000) Add: Provision of Tax |
|
3,00,000
30,000 |
|
Net profit before tax and extraordinary items Add: Depreciation on Fixed assets Loss on sale of Fixed Assets |
80,000 8,000 |
3,30,000 ,
88,000 |
|
Operating Profit Before Working Capital Changes Add: Trade Payable |
|
4,18,000 1,10,000 |
|
|
|
5,28,000 |
|
Less: Current Assets (5,20,000-4,60,000) |
1 |
60,000 |
|
Cash Generated from operation |
|
4,68,000 |
|
Less: Tax paid |
|
30,000 |
|
Cash flow from operating activities |
|
4,38,000 |
|
I. Cash flow from Investing activities Proceeds From Sale of Fixed Assets Payments for the purchase of Fixed Assets |
|
32,000 (1,87,000) |
|
Cash Used in Investing activities |
|
1,55,000 |
Working notes:
|
Dr. |
Fixed Assets A/c |
Cr. |
|
|
Particulars |
₹ |
Particulars |
₹ |
|
To Balance B/d To Bank a/c (Purchase)
|
3,25,000 1,87,000 |
By bank a/c (Sale) By P&L a/c (Loss) By Depreciation a/c By Balance C/d |
32,000 8,000 80,000 3,92,000 |
|
|
5,12,000 |
|
5,12,000 |
Space
|
Dr. |
Provision for Tax A/c |
Cr. |
|
|
Particulars |
₹ |
Particulars |
₹ |
|
To Bank a/c (Tax Paid) To Balance C/d |
30,000
30,000 |
By Balance B/d By P&L a/c (Tax Provided)
|
30,000 30,000
|
|
|
1,30,000 |
|
1,30,000 |
Question 32:
From the following information, calculation Cash Flow from Operating Activities and Investing Activities:
|
Particular |
31st, March, 2025 (₹) |
31st, March, 2026 (₹) |
|
Surplus, i.e., Balance in Statement of Profit and Loss |
2,50,000 |
10,00,000 |
|
Provision for Tax |
75,000 |
75,000 |
|
Trade Payables |
1,00,000 |
3,75,000 |
|
Current Assets (Trade Receivables and Inventories) |
11,50,000 |
13,00,000 |
|
Fixed Assets (Tangible) |
21,25,000 |
23,30,000 |
|
Accumulated Depreciation |
10,62,500 |
11,00,000 |
Additional
Information:
1. A machine having book value of ₹ 1,00,000 (Depreciation provided
thereon ₹ 1,62,500) was sold at a loss of ₹ 20,000.
2. Tax paid during the year ₹ 75,000.
Answer:
|
Cash flow Statement |
||
|
for the year ended 31st March, 2026 |
||
|
Particulars |
(₹) |
(₹) |
|
A. Cash Flow from Operating Activities |
|
|
|
Net Profit as per Statement of Profit & Loss |
7,50,000 |
|
|
Add: Provision for Tax made |
75,000 |
|
|
Net Profit before Tax and Extraordinary Items |
8,25,000 |
|
|
Add: Depreciation charged during the year |
2,00,000 |
|
|
Add: Loss on Sale of Machine |
20,000 |
|
|
Net Profit before working Capital changes |
10,45,000 |
|
|
Add: Increase in Trade Payables |
2,75,000 |
|
|
Less: Increase in Current Assets |
(1,50,000) |
|
|
Net Profit before Tax |
11,70,000 |
|
|
Less: Tax Paid during the year |
75,000 |
|
|
Cash Flow from Operating Activities |
|
10,95,000 |
|
B. Cash flow from Investing Activities |
|
|
|
Purchase of Fixed Asset |
(4,67,500) |
|
|
Sale of Machine |
80,000 |
|
|
Cash used in Investing Activities |
|
3,87,500 |
|
Dr. |
Accumulated Depreciation A/c |
Cr. |
|||||
|
Date |
Particulars |
(₹) |
Date |
Particulars |
(₹) |
||
|
2026 |
|
|
2025 |
|
|
||
|
March 31 |
To Fixed Asset A/c |
1,62,500 |
April 01 |
By Balance b/d |
10,62,500 |
||
|
March 31 |
To balance c/d |
11,00,000 |
|
By Statement of Profit & Loss A/c |
2,00,000 |
||
|
|
|
|
|
|
|
||
|
|
|
12,62,500 |
|
|
12,62,500 |
||
|
|
|
|
|
|
|
||
|
Dr. |
Fixed Assets A/c |
Cr. |
|||||
|
Date |
Particulars |
(₹) |
Date |
Particulars |
(₹) |
||
|
2025 |
|
|
2026 |
|
|
||
|
April 01 |
To balance b/d |
21,25,000 |
March 31 |
By Accumulated Depreciation A/c |
1,62,500 |
||
|
2026 |
|
|
March 31 |
By Statement of Profit & Loss A/c- Loss |
20,000 |
||
|
|
|
|
March 31 |
By Bank A/c (1,00,000 – 20,000) |
80,000 |
||
|
March 31 |
To Cash/Bank A/c |
4,67,500 |
March 31 |
By balance c/d |
23,30,000 |
||
|
|
|
|
|
|
|
||
|
|
|
25,92,500 |
|
|
25,92,500 |
||
|
|
|
|
|
|
|
||
Click below for more Questions
Ts Grewal Solution 2026-2027
Class 12 / Volume – 3
Chapter 5 – Cash Flow Statements
Question No. 1 To 4
Question No. 5 To 8
Question No. 9 To 12
Question No. 13 To 16
Question No. 17 To 20
Question No. 21 To 24
Question No. 25 To 28
Question No. 29 To 32
Question No. 33 To 36
Question No. 37 To 40
Question No. 41 To 44
Question No. 45 To 48
Question No. 49 To 52