Question 53:
Following
is the Balance Sheet of Akash Ltd. as at 31st March,
2023. Prepare Cash Flow Statement:
|
Particulars |
|
31st March, 2023 (`) |
31st March, 2022 (`) |
|
|
|
|
|
|
I. EQUITY AND LIABILITIES |
|
|
|
|
1. Shareholders' Funds |
|
|
|
|
(a) Share Capital |
|
30,00,000 |
20,00,000 |
|
(b) Reserves and Surplus |
1 |
(4,25,000) |
(5,37,500) |
|
2. Non-Current Liabilities |
|
|
|
|
Long-term Borrowings |
2 |
7,50,000 |
6,25,000 |
|
3. Current Liabilities |
|
|
|
|
Trade Payables |
|
4,75,000 |
6,75,000 |
|
Total |
|
38,00,000 |
27,62,500 |
|
|
|
|
|
|
II. ASSETS |
|
|
|
|
1. Non-Current
Assets |
|
|
|
|
(a) Property, Plant and Equipment (Fixed Assets): |
|
|
|
|
-Tangible Assets (Machinery) |
|
17,25,000 |
12,50,000 |
|
(b) Non-current Investments |
|
3,00,000 |
5,00,000 |
|
2. Current Assets |
|
|
|
|
(a) Inventories |
|
10,00,000 |
7,50,000 |
|
(b) Trade Receivables |
|
6,00,000 |
1,12,500 |
|
(c) Cash and Cash Equivalents |
|
1,75,000 |
1,50,000 |
|
Total |
|
38,00,000 |
27,62,500 |
Notes to Accounts
|
Particulars |
31st March, 2022 (`) |
31st March, 2020 (`) |
|
1. Reserves and Surplus |
|
|
|
Surplus, i.e, Balance in
Statement of Profit and Loss |
(4,25,000) |
(5,37,500) |
|
2. Long-term Borrowings |
|
|
|
12% Debentures |
7,50,000 |
6,25,000 |
Additional Information:
(i) Debentures were issued on 1st January, 2023.
(i) Machinery costing ` 5,00,000
on which depreciation charged was ` 1,75,000 was sold for ` 3,75,000.
(ii)
Depreciation charged during the year amounted to ` 2,00,000.
(iv) Non-current Investments were sold at a profit of 20%.
Prepare
Cash Flow Statement.
Answer:
|
Akash Ltd. Cash Flow Statement
as at 31st March, 2023 |
|||
|
|
Particulars |
Detail |
(`) |
|
I. |
Cash Flow From
operating Activity |
|
|
|
|
Surplus, i.e, Balance in
Statement of Profit and Loss |
|
(1,12,500) |
|
Add: |
Depreciation on Machinery |
2,00,000 |
|
|
|
Interest on Debenture |
78,750 |
2,78,750 |
|
|
|
|
3,91,250 |
|
Less: |
Profit on sale of Machinery |
(50,000) |
|
|
|
Profit on sale of Non-Current Investment |
(40,000) |
(90,000) |
|
|
Operating Profit before working capital changes |
|
3,01,250 |
|
|
|
|
|
|
Less: |
Increase in Assets
and Decrease in Liabilities |
|
|
|
|
Decrease in Trade Payable |
(2,00,000) |
|
|
|
Increase in inventories |
(2,50,000) |
|
|
|
Increase in Trade Receivables |
(4,87,500) |
(9,37,500) |
|
|
Cash Used in
operating Activity |
|
(6,36,250) |
|
|
|
|
|
|
II. |
Cash Flow From
Investing Activity |
|
|
|
|
Proceeds from Sale of Machinery |
2,40,000 |
|
|
|
Proceeds from Sale of Non-Current Investment |
3,75,000 |
6,15,000 |
|
|
Payment for purchase of Machinery |
|
(10,00,000) |
|
|
Cash used in
Investing Activity |
|
(3,85,000) |
|
|
|
|
|
|
III. |
Cash Flow From
Financing Activity |
|
|
|
|
Issue of Shares |
10,00,000 |
|
|
|
Issue of Debentures |
1,25,000 |
11,25,000 |
|
|
Payment of Interest on debentures |
|
(78,750) |
|
|
Cash Flow From
Financing Activity |
|
10,46,250 |
|
|
Net increase in in
cash and cash equivalent |
|
25,000 |
|
Add: |
Opening Cash
and Cash Equivalents |
|
1,50,000 |
|
|
closing Cash and
Cash Equivalents |
|
1,75,000 |
|
|
|
|
|
Working Notes:
|
Dr. |
Machinery A/c |
Cr. |
|
|
Particulars |
` |
Particulars |
` |
|
To Balance B/d |
12,50,000 |
By Bank A/c (Sale) |
3,75,000 |
|
To P&L a/c (Profit on sale) |
50,000 |
By P&L a/c (Depreciation provided during the year) |
2,00,000 |
|
To Bank a/c (Purchase) |
10,00,000 |
By Balance C/d |
17,25,000 |
|
|
23,00,000 |
|
23,00,000 |
Question 54:
From the following Balance Sheet of Samta Ltd., as at 31st March, 2023, prepare Cash Flow Statement:
|
Particulars |
Note
No. |
31st
March, 2023 (`) |
31st
March, (`) |
|
I. EQUITY AND LIABILITIES |
|
|
|
|
1. Shareholders' Funds |
|
|
|
|
(a) Share Capital |
1 |
7,50,000 |
7,50,000 |
|
(b) Reserves and Surplus |
2 |
3,05,000 |
(20,000) |
|
2. Non-Current Liabilities |
|
|
|
|
Long-term Borrowings (8% Debentures) |
|
2,60,000 |
1,50,000 |
|
3. Current Liabilities |
|
|
|
|
(a) Short-term Borrowings (8% Bank Loan) |
|
40,000 |
50,000 |
|
(b) Trade Payables |
|
1,20,000 |
1,10,000 |
|
(c) Short-term Provisions |
3 |
50,000 |
40,000 |
|
Total |
|
15,25,000 |
10,80,000 |
|
II. ASSETS |
|
|
|
|
1. Non-Current Assets |
|
|
|
|
(a) Fixed Assets: |
|
|
|
|
(i) Tangible Assets (Net) |
|
8,60,000 |
6,20,000 |
|
(ii) Intangible Assets (Goodwill) |
|
15,000 |
40,000 |
|
(b) Non-Current Investments |
|
1,25,000 |
80,000 |
|
2. Current Assets |
|
|
|
|
(a) Current Investments |
|
5,000 |
15,000 |
|
(b) Inventories |
|
1,95,000 |
1,00,000 |
|
(c) Trade Receivables |
|
2,00,000 |
2,00,000 |
|
(d) Cash and Cash Equivalents |
|
1,25,000 |
25,000 |
|
Total |
|
15,25,000 |
10,80,000 |
|
|
|
|
|
Notes to Accounts
|
Particulars |
|
31st March, 2023 (`) |
31st March, 2022 (`) |
|
1. Share Capital |
|
|
|
|
Equity Share
Capital |
|
5,50,000 |
4,50,000 |
|
12% Preference
Share Capital |
|
2,00,000 |
3,00,000 |
|
|
|
7,50,000 |
7,50,000 |
|
2. Reserves and Surplus |
|
|
|
|
Securities Premium Reserve |
10,000 |
... |
|
|
Less: Premium on redemption on pref. shares |
5,000 |
5,000 |
|
|
General Reserve |
|
1,50,000 |
1,20,000 |
|
Surplus, i.e., Balance in Statement of Profit and
Loss |
|
1,50,000 |
(1,40,000) |
|
|
|
3,05,000 |
(20,000) |
|
4. Short-term Provisions |
|
|
|
|
Provision for Tax |
|
50,000 |
40,000 |
|
|
|
|
|
Additional Information :
(i) During the year a piece of machinery costing `
60,000 on which depreciation charged was
` 20,000 was sold at 50% of
its book value. Depreciation provided on tangible Assets `
60,000;
(ii) Income tax ` 45,000 was provided;
(iii) Additional Debentures were issued at par on 1st October, 2022 and Bank
Loan was repaid on the same date;
(iv) At the end of the year Preference Shares were redeemed at a premium of 5%.
Answer:
|
|
Cash Flow Statement for the year ended March 31, 2023 |
||||
|
|
Particulars |
Amount (`) |
Amount (`) |
||
|
A |
Cash Flow from Operating Activities |
|
|
||
|
|
Profit as per Statement of Profit and Loss [1,50,000 − (−1,40,000)] |
2,90,000 |
|||
|
|
Provision for Tax |
45,000 |
|
||
|
|
General Reserve |
30,000 |
75,000 |
||
|
|
Profit Before Taxation |
|
3,65,000 |
||
|
|
Items to be Added: |
|
|
||
|
|
Depreciation on Fixed Assets |
60,000 |
|
||
|
|
Loss on Fixed Assets |
20,000 |
|
||
|
|
Interest on Debentures (6,000 + 10,400) |
16,400 |
|
||
|
|
Interest on Bank Loan (2,000 + 1,600) |
3,600 |
|
||
|
|
Premium on Redemption of Preference Shares |
5,000 |
|
||
|
|
Goodwill written off |
25,000 |
1,30,000 |
||
|
|
Operating Profit before Working Capital Adjustments |
|
4,95,000 |
||
|
|
Less: Increase in Current Assets |
|
|
||
|
|
|
Inventories |
(95,000) |
|
|
|
|
Add: Increase in Current Liabilities |
|
|
||
|
|
Trade Payables |
10,000 |
(85,000) |
||
|
|
Cash Generated from Operations |
|
4,10,000 |
||
|
|
Less: Tax Paid |
|
(40,000) |
||
|
|
Net Cash Flows from Operating Activities |
|
3,70,000 |
||
|
|
|
|
|
|
|
|
B |
Cash Flow from Investing Activities |
|
|
||
|
|
|
Sale of Fixed Assets |
20,000 |
|
|
|
|
|
Purchase of Fixed Assets |
(3,40,000) |
|
|
|
|
|
Purchase of Investment |
(45,000) |
|
|
|
|
Net Cash Used in Investing Activities |
|
(3,65,000) |
||
|
|
|
|
|
||
|
C |
Cash Flow from Financing Activities |
|
|
||
|
|
Proceeds from Issue of Share Capital |
1,00,000 |
|
||
|
|
Proceeds from Issue of Debentures |
1,10,000 |
|
||
|
|
Interest on Debentures Paid |
(16,400) |
|
||
|
|
Redemption of Preference Share Capital |
(1,00,000) |
|
||
|
|
Premium on Redemption of Preference Share Capital |
(5,000) |
|
||
|
|
Security Premium Reserve |
10,000 |
|
||
|
|
Repayment of Bank Loan |
(10,000) |
|
||
|
|
Interest on Bank Loan Paid |
(3,600) |
|
||
|
|
Net Cash Flow from Financing Activities |
|
85,000 |
||
|
D |
Net Increase in Cash and Cash Equivalents |
|
90,000 |
||
|
|
|
Add: Cash and Cash Equivalent in the beginning of the period (25,000+15,000) |
|
40,000 |
|
|
|
Cash and Cash Equivalents at the end of the period (1,30,000+5,000) |
|
1,30,000 |
||
|
|
|
|
|
||
|
|
|
|
|
|
|
Working Notes:
WN1:
|
Fixed Assets Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (`) |
Particulars |
Amount (`) |
|
Balance b/d |
6,20,000 |
Bank A/c (Sale) (40,000×50%) |
20,000 |
|
Bank A/c (Purchase- Bal. Fig.) |
3,40,000 |
Depreciation |
60,000 |
|
|
|
Profit and Loss A/c (Loss on Sale) |
20,000 |
|
|
|
Balance c/d |
8,60,000 |
|
|
9,60,000 |
|
9,60,000 |
|
|
|
|
|
WN2:
|
Provision for Taxation Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (`) |
Particulars |
Amount (`) |
|
Bank A/c (Tax Paid) (Bal. Fig.) |
35,000 |
Balance b/d |
40,000 |
|
Balance c/d |
50,000 |
Profit and Loss A/c |
45,000 |
|
|
85,000 |
|
85,000 |
|
|
|
|
|
Question 55:
From the following Balance Sheet and information of Sun Ltd., prepare Cash Flow Statement:
|
Particulars |
Note
No. |
31st
March, 2023 (`) |
31st
March, 2022 (`) |
|
I. EQUITY AND LIABILITIES |
|
|
|
|
1. Shareholders' Funds |
|
|
|
|
(a) Share Capital |
1 |
7,00,000 |
6,00,000 |
|
(b) Reserves and Surplus |
2 |
4,10,000 |
2,00,000 |
|
2. Non-Current Liabilities |
|
|
|
|
Long-term Borrowings: 10% Debentures |
|
3,00,000 |
2,00,000 |
|
3. Current Liabilities |
|
|
|
|
(a) Trade Payables |
|
1,40,000 |
60,000 |
|
Total |
|
15,50,000 |
10,60,000 |
|
II. ASSETS |
|
|
|
|
1. Non-Current Assets |
|
|
|
|
(a) Fixed Assets−Tangible |
|
7,00,000 |
6,00,000 |
|
(b) 10% Investments |
|
2,00,000 |
1,00,000 |
|
2. Current Assets |
|
|
|
|
(a) Current Investments |
|
90,000 |
50,000 |
|
(b) Inventories |
|
2,00,000 |
1,00,000 |
|
(c) Trade Receivables |
3 |
2,80,000 |
1,90,000 |
|
(d) Cash and Cash Equivalents |
|
80,000 |
20,000 |
|
Total |
|
15,50,000 |
10,60,000 |
|
|
|
|
|
|
Notes to Accounts
: |
||
|
Particulars |
31st March, 2023 (`) |
31st March, 2022 (`) |
|
1. Share
Capital |
|
|
|
Equity Share
Capital |
5,00,000 |
3,00,000 |
|
10% Preference
Share Capital |
2,00,000 |
3,00,000 |
|
|
7,00,000 |
6,00,000 |
|
2. Reserves and
Surplus |
|
|
|
Securities Premium
Reserve |
10,000 |
... |
|
Surplus i.e.,
Balance in Statement of Profit and Loss |
4,00,000 |
2,00,000 |
|
|
4,10,000 |
2,00,000 |
|
3. Trade
Receivables |
|
|
|
Sundry Debtors |
3,00,000 |
2,00,000 |
|
Less: Provision for Doubtful Debts |
20,000 |
10,000 |
|
|
2,80,000 |
1,90,000 |
|
|
|
|
You are informed that during the year:
|
(i) |
Proposed Dividend: |
31st
March, 2023 |
31st
March, 2022 |
|
|
Equity Share Capital |
Nil |
Nil |
|
|
Preference Share Capital |
10% |
10% |
(ii) A machine with a book value of `
90,000 was sold for ` 50,000;
(iii) Depreciation charged during the year
` 60,000;
(iv) Debentures were issued on 1st April, 2022;
(v) Investments were purchased on 31st March, 2023;
(vi) Preference shares were redeemed on 31st December,2022;
(vii) An interim dividend @ 15% was paid on equity shares on 31st December,
2022;
(viii) Fresh equity shares were issued at a premium of 5% on 31st March, 2023.
Answer:
|
|
Cash Flow Statement for the year ended March 31, 2023 |
||||
|
|
Particulars |
Amount (`) |
Amount (`) |
||
|
A |
Cash Flow from Operating Activities |
|
|
||
|
|
Profit as per Statement of Profit and Loss |
2,00,000 |
|
||
|
|
Preference Dividend (3,00,000×10100)W.N.-1 |
30,000 |
|
||
|
|
Profit Before Taxation |
|
2,30,000 |
||
|
|
Items to be Added: |
|
|
||
|
|
Depreciation on Fixed Assets |
60,000 |
|
||
|
|
Loss on Fixed Assets |
40,000 |
|
||
|
|
Interest on Debentures |
30,000 |
|
||
|
|
Dividend on Equity Shares |
45,000 |
|
||
|
|
Provision for Doubtful Debts |
10,000 |
|
||
|
|
Items to be Deducted: |
|
|
||
|
|
Interest on Investment |
(10,000) |
1,75,000 |
||
|
|
Operating Profit before Working Capital Adjustments |
|
4,05,000 |
||
|
|
Less: Increase in Current Assets |
|
|
||
|
|
|
Trade Receivables |
(1,00,000) |
|
|
|
|
|
Inventories |
(1,00,000) |
(2,00,000) |
|
|
|
Add: Increase in Current Liabilities |
|
|
||
|
|
Trade Payables |
80,000 |
80,000 |
||
|
|
Cash Generated from Operations |
|
2,85,000 |
||
|
|
Less: Tax Paid |
|
- |
||
|
|
Net Cash Flows from Operating Activities |
|
2,85,000 |
||
|
|
|
|
|
|
|
|
B |
Cash Flow from Investing Activities |
|
|
||
|
|
|
Sale of Fixed Assets |
50,000 |
|
|
|
|
|
Purchase of Fixed Assets |
(2,50,000) |
|
|
|
|
|
Purchase of Investment |
(1,00,000) |
|
|
|
|
|
Interest on Investment |
10,000 |
|
|
|
|
Net Cash Used in Investing Activities |
|
(2,90,000) |
||
|
|
|
|
|
||
|
C |
Cash Flow from Financing Activities |
|
|
||
|
|
Proceeds from Issue of Share Capital |
2,00,000 |
|
||
|
|
Proceeds from Issue of Debentures |
1,00,000 |
|
||
|
|
Interest on Debentures Paid |
(30,000) |
|
||
|
|
Redemption of Preference Share Capital |
(1,00,000) |
|
||
|
|
Security Premium Reserve |
10,000 |
|
||
|
|
Dividend Paid on Preference Share Capital |
(30,000) |
|
||
|
|
Dividend Paid on Equity Share Capital |
(45,000) |
|
||
|
|
Net Cash Flow from Financing Activities |
|
1,05,000 |
||
|
|
|
|
|
|
|
|
D |
Net Increase in Cash and Cash Equivalents |
|
1,00,000 |
||
|
|
|
Add: Cash and Cash Equivalent in the beginning of the period (50,000+20,000) |
|
70,000 |
|
|
|
Cash and Cash Equivalents at the end of the period (90,000+80,000) |
|
1,70,000 |
||
|
|
|
|
|
||
|
|
|
|
|
|
|
Working Notes:
(1) Dividend on 10% Preference Shares has been calculated
on the value as on 31st March, 2018 as `1,00,000 Preference Shares were redeemed on
31st December, 2018.
(2)
|
Fixed Assets Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount (`) |
Particulars |
Amount (`) |
|
Balance b/d |
6,00,000 |
Bank A/c (Sale) |
50,000 |
|
Bank A/c (Purchase- Bal. Fig.) |
2,50,000 |
Depreciation |
60,000 |
|
|
|
Profit and Loss A/c (Loss on Sale) |
40,000 |
|
|
|
Balance c/d |
7,00,000 |
|
|
8,50,000 |
|
8,50,000 |
|
|
|
|
|
Question 56: Read the
following hypothetical text and answer the given questions on its basis. Profit
for the year ended 31st March, 2023 of iPay (a
payment processing start up) was `15,00,000
after accounting the following:
Particulars
|
`
|
Depreciation
|
1,00,000
|
Loss of Furniture due to Fire
|
10,000
|
Interest on Investment
(Long-term)
|
25,000
|
Tax Refund
|
10,000
|
Additional
Information:
Particulars
|
31st March, 2023
|
31st March, 2022
|
Share Capital
|
20,00,000
|
15,00,000
|
Securities Premium
|
15,00,000
|
20,00,000
|
General Reserve
|
2,50,000
|
2,50,000
|
Machinery
|
5,00,000
|
3,00,000
|
Furniture
|
80,000
|
1,00,000
|
Marketable Securities
|
1,00,000
|
-
|
10% Non-current Investment
|
3,00,000
|
2,00,000
|
Patents
|
50,000
|
80,000
|
Cash-in-Hand and at Bank
|
50,000
|
1,00,000
|
Bank Overdraft
|
5,00,000
|
7,00,000
|
Provision for
Tax
|
1,00,000
|
75,000
|
(i) Patents purchased during the year was ` 50,000.
(ii) Proposed
Dividend for the year ended 31st March, 2022 and 2023 was `1,50,000 and ` 2,00,000 respectively.
(iii) Interim Dividend
during the year ended 31st March, 2022 and 2023 was `50,000 and ` 1,20,000 respectively.
You are
required to:
1. Determine
Net Profit before Tax and Extraordinary items.
2. Determine
Operating Profit before Working Capital Changes.
3. Determine Cash
Flow from Investing Activities.
4. Determine
Cash Flow from Financing Activities.
5. Determine
Cash and Cash Equivalents.
Answer:
|
|
Cash Flow Statement for the year ended March 31, 2023 |
|||
|
|
Particulars |
Amount (`) |
Amount (`) |
|
|
A |
Cash Flow from Operating Activities |
|
|
|
|
|
Profit as per Statement of Profit and Loss |
|
15,00,000 |
|
|
|
Provision for Tax |
1,00,000 |
|
|
|
|
Loss of Furniture due to Fire (Extraordinary item) |
10,000 |
|
|
|
|
Proposed Dividend |
1,50,000 |
|
|
|
|
Interim Dividend |
1,20,000 |
3,70,000 |
|
|
|
|
|
18,80,000 |
|
|
|
Less: Refund of Tax |
|
10,000 |
|
|
|
Profit Before Taxation |
|
18,70,000 |
|
|
|
|
|
|
|
|
|
Items to be Added: |
|
|
|
|
|
Depreciation
|
1,00,000
|
|
|
|
|
Patent amortised |
80,000 |
1,80,000 |
|
|
|
|
|
20,50,000 |
|
|
|
Less: Interest on Investment (Long-term)
|
25,000
|
(25,000) |
|
|
|
Operating Profit before Working Capital Adjustments |
|
20,25,000 |
|
|
|
|
|
|
|
Cash
Flow from Investing Activities
|
|
Particulars |
Amount (`) |
Amount (`) |
|
A |
Cash Flow from Investing Activities |
|
|
|
|
Interest on investment |
|
25,000 |
|
|
Sale proceed of furniture |
|
10,000 |
|
|
Payment for the purchases of machine |
|
(3,00,000) |
|
|
Payment for the purchases of patent |
|
(50,000) |
|
|
Payment for the purchases of investment |
|
(1,00,000) |
|
|
Cash used in investing activity |
|
(4,15,000) |
|
|
|
|
|
Cash
Flow from Financing Activities
|
|
Particulars |
Amount (`) |
Amount (`) |
|
A |
Cash Flow from Financing Activities |
|
|
|
|
Issue of share capital |
|
5,00,000 |
|
|
Bank overdraft |
(2,00,000) |
|
|
|
Proposed Dividend paid during the year |
(1,50,000) |
|
|
|
Interim Dividend paid during the year |
(1,20,000) |
(4,70,000) |
|
|
|
|
|
|
|
Cash Flow From Financing activity |
|
30,000 |
|
|
|
|
|
Working
notes:
|
Machinery A/c |
|||
|
Particulars |
` |
Particulars |
` |
|
To balance b/d |
3,00,000 |
By P&L A/c(Dep.) |
1,00,000 |
|
To
bank A/c– Bal. figure |
3,00,000 |
By balance C/d |
5,00,000 |
|
(Purchase) |
|
|
|
|
|
|
|
|
|
|
6,00,000 |
|
6,00,000 |
|
Furniture A/c |
|||
|
Particulars |
` |
Particulars |
` |
|
To balance b/d |
1,00,000 |
By
Bank A/c(Sale) Bal. |
10,000 |
|
|
|
By loss by fire |
10,000 |
|
|
|
By balance C/d |
80,000 |
|
|
|
|
|
|
|
1,00,000 |
|
1,00,000 |
|
Patent A/c |
|||
|
Particulars |
` |
Particulars |
` |
|
To balance b/d |
80,000 |
By
Amortisation A/c (Bal.
figures) |
80,000 |
|
To Bank
A/c(Purchase) Bal. |
50,000 |
By balance C/d |
50,000 |
|
|
1,30,000 |
|
1,30,000 |
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Ts Grewal Solution 2024-2025
Class 12 / Volume – 3
Chapter 4 – Cash Flow Statements