Question

Following is the Balance Sheet of J.M. Ltd. as at 31.3.2016:   

J.M. Ltd. Balance Sheet as at 31.3.2016
Particulars	NoteNo.	31.03.2016 (Rs)	31.03.2015 (Rs)
I. Equity and Liabilities : (1) Shareholder's Funds:
(a) Share Capital		2,25,000	1,75,000
(b) Reserves and Surplus	1	62,500	25,000
(2) Non-current Liabilities:
Long-Term Borrowings	2	1,12,500	87,500
(3) Current Liabilities:
(a) Short-term Borrowings	3	37,500	18,750
(b) Short-term Provisions	4	50,000	31,250
Total		4,87,500	3,37,500
II. Assets:
(1) Non-current Assets:
(a) Fixed Assets:
(i) Tangible	5	3,66,250	2,28,750
(ii) Intangible	6	25,000	37,500
(b) Non-current Investments		37,500	25,000
(2) Current Assets:
(a) Current Investments		10,000	17,500
(b) Inventories	7	30,500	18,000
(c) Cash and Cash Equivalents		18,250	10,750
Total		4,87,500	3,37,500

            Notes to Accounts :

Note No.	Particulars	31.03.2016 (Rs)	31.03.2015 (Rs)
(1)	Reserves and Surplus
	(Surplus i.e. Balance in the Statement of Profit and Loss)	62,500	25,000
		62,500	25,000
(2)	Long-term Borrowings
	12% Debentures	1,12,500	87,500
		1,12,500	87,500
(3)	Short-term Borrowings
	Bank overdraft	37,500	18,750
		37,500	18,750
(4)	Short-term Provisions
	Proposed Dividend	50,000	31,250
		50,000	31,250
(5)	Tangible Assets
	Machinery	4,18,750	2,63,750
	Accumulated Depreciation	(52,500)	(35,000)
		3,66,250	2,28,750
(6)	Intangible Assets
	Goodwill	25,000	37,500
		25,000	37,500
(7)	Inventories
	Stock in Trade	30,500	18,000
		30,500	18,000

Additional Information :

 

(1) Rs 25,000, 12% Debentures were issued on 31.3.2016.

 

(2)  During the year a piece of machinery costing Rs 20,000 on which accumulated depreciation was Rs 10,000 was sold at a loss of Rs 2,500.

 

Prepare a Cash Flow Statement.

Answer 1

Cash Flow Statement                                                       for the year ended March 31, 2016
	Particulars		Amount (Rs)	Amount (Rs)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss		37,500
	Proposed Dividend		50,000	87,500
	Profit Before Taxation			87,500
	Items to be Added:
	Goodwill written off		12,500
	Debentures interest		10,500
	Depreciation		27,500
	Loss on sale of machinery		2,500	53,000
	Operating Profit before Working Capital Adjustments			1,40,500
	Less: Increase in Current Assets
		Inventories	(12,500)	(12,500)
	Cash Generated from Operations			1,28,000
	Less: Tax Paid			-
	Net Cash Flows from Operating Activities			1,28,000
B	Cash Flow from Investing Activities
		Sale of machinery	7,500
		Purchase of machinery	(1,75,000)
		Purchase of non-current investment	(12,500)	(1,80,000)
	Net Cash Used in Investing Activities			(1,80,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital		50,000
	Increase in Bank Overdraft		18,750
	Interest on Debentures paid		(10,500)
	Proceeds from Issue of Debentures		25,000
	Proposed Dividend Paid		(31,250)
	Net Cash Flow from Financing Activities			52,000
D	Net ↑/↓ in Cash and Cash Equivalents (A+B+C)			-
		Add: Cash and Cash Equivalent in the beginning of the period (10,750+17,500)		28,250
	Cash and Cash Equivalents at the end of the period (18,250+10,000)			28,250