Question

From the following Balance Sheet of Mishi Ltd. as at 31st March, 2019, prepare Cash Flow Statement:

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		16,00,000	12,00,000
(b) Reserves and Surplus	1	6,60,000	4,40,000
2. Non-Current Liabilities
Long-term Borrowings (10% Debentures)		3,20,000	2,00,000
3. Current Liabilities
(a) Short-term Borrowing (Bank Loan)		80,000	1,10,000
(b) Trade Payables		1,50,000	1,80,000
Total      Total Expenses		28,10,000	21,30,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible	2	19,00,000	12,10,000
(b) Non-Current Investments		2,70,000	2,00,000
2. Current Assets
(a) Current Investments		1,60,000	80,000
(b) Trade Receivables		1,80,000	4,00,000
(c) Cash and Cash Equivalents	3	3,00,000	2,40,000
Total		28,10,000	21,30,000

  

Notes to Accounts :
Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
1. Reserves and Surplus :
Securities Premium Reserve	20,000	...
General Reserve	3,00,000	2,40,000
Surplus i.e., Balance in the Statement of Profit and Loss	3,40,000	2,00,000
	6,60,000	4,40,000
2. Fixed Assets−Tangible
Machinery (Cost)	21,40,000	14,00,000
Less: Accumulated Depreciation	2,40,000	1,90,000
	19,00,000	12,10,000
3. Cash and Cash Equivalents
Cash in Hand	1,40,000	1,10,000
Bank Balance	1,60,000	1,30,000
	3,00,000	2,40,000

Additional Information :
(i) During the year, Machinery costing ₹ 1,40,000 (accumulated depreciation provided thereon ₹ 1,10,000) was sold for ₹ 20,000.
(ii) During the year, Non-current Investments costing ₹ 80,000 were sold at a profit of ₹ 16,000.

Answer 1

		Cash Flow Statement  for the year ended March 31, 2019
	Particulars			Amount (₹)	Amount (₹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			1,40,000
	General Reserve			60,000
	Profit Before Taxation				2,00,000
	Items to be Added:
	Depreciation			1,60,000
	Debentures Interest			20,000
	Loss on Sale of Fixed Assets			10,000
	Items to be Deducted:
	Profit on sale of Investment			(16,000)	1,74,000
	Operating Profit before Working Capital Adjustments				3,74,000
	Less: Decrease in Current Liabilities
	Trade Payables			(30,000)
	Add: Decrease in Current Assets
	Trade Receivables			2,20,000	1,90,000
	Cash Generated from Operations				5,64,000
	Less: Tax Paid				-
	Net Cash Flows from Operating Activities				5,64,000
B	Cash Flow from Investing Activities
			Sale of Fixed Assets	20,000
			Sale of Non-Current Investment	96,000
			Purchase of Non-Current Investment	(1,50,000)
			Purchase of Fixed Assets	(8,80,000)
	Net Cash Used in Investing Activities				(9,14,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			4,00,000
	Proceeds from Issue of issue of Debentures			1,20,000
	Security Premium Reserve			20,000
	Repayment of Bank Loan			(30,000)
	Interest Paid			(20,000)
	Net Cash Flow from Financing Activities				4,90,000
D	Net Increase Decrease in Cash and Cash Equivalents				1,40,000
			Add: Cash and Cash Equivalent in the beginning of the period (1,10,000+1,30,000+80,000)		3,20,000
	Cash and Cash Equivalents at the end of the period (1,40,000+1,60,000+1,60,000)				4,60,000

Working Notes:
WN1:

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	14,00,000	Bank A/c (Sale)	20,000
Bank A/c (Purchase- Bal. Fig.)	8,80,000	Accumulated Depreciation	1,10,000
		Profit and Loss A/c (Loss on Sale)	10,000
		Balance c/d	21,40,000
	22,80,000		22,80,000

WN2:

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Fixed Assets A/c	1,10,000	Balance b/d	1,90,000
Balance c/d	2,40,000	Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)	1,60,000
	3,50,000		3,50,000

WN3:

Non-Current Investment Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	2,00,000	Bank A/c (Sale) (80,000+16,000)	96,000
Profit and Loss A/c (Profit on Sale)	16,000	Balance c/d	2,70,000
Bank A/c (Purchase- Bal. Fig.)	1,50,000
	3,66,000		3,66,000