Question

From the following Balance Sheet of Mohan Ltd., prepare cash flow Statement:

Balance Sheet of Mohan Ltd.,
as at 31st March 2016 and 31 March 2017

Particulars	Note No.	March 31, 2017 (Rs)	March 31, 2016 (Rs)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Equity share capital		3,00,000	2,00,000
b) Reserves and surplus		2,00,000	1,60,000
2. Non-current liabilities
a) Long-term borrowings	1	80,000	1,00,000
3. Current liabilities
Trade payables		1,20,000	1,40,000
Short-term provisions	2	70,000	60,000
Total		7,70,000	6,60,000
II) Assets
1. Non-current assets
Fixed assets	3	5,00,000	3,20,000
2. Current assets
a) Inventories		1,50,000	1,30,000
b) Trade receivables	4	90,000	1,20,000
c) Cash and cash equivalents	5	30,000	90,000
Total		7,70,000	6,60,000

Notes to accounts:

	2017	2016
1. Long-term borrowings
Bank Loan	80,000	1,00,000
2. Short-term provision
Proposed dividend	70,000	60,000
3. Fixed assets	6,00,000	4,00,000
Less: Accumulated Depreciation	1,00,000	80,000
(Net) Fixed Assets	5,00,000	3,20,000
4. Trade receivables
Debtors	60,000	1,00,000
Bills receivables	30,000	20,000
	90,000	1,20,000
5. Cash and cash equivalents Bank	30,000	90,000

Additional Information:

Machine Costing Rs. 80,000 on which accumulated depreciation was Rs. 50,000 was sold for Rs. 20,000.

Answer 1

Cash Flow Statement of Mohan Ltd.

Particulars			Amount Rs	Amount Rs
A.	Cash Flow from Operating Activities
	Profit as per the Balance Sheet  (2,00,000 – 1,60,000)			40,000
	Proposed Dividend			70,000
	Net Profit before Taxation and Extraordinary items				1,10,000
	Adjustments:
		Depreciation		70,000
		Loss on Sale of Machine		10,000	80,000
	Operating Profit before Working Capital changes				1,90,000
		Add:	Decrease in Current Assets
			Debtors	40,000	40,000
					2,30,000
		Less:	Increase in Current Assets
			Inventories	(20,000)
			Bills Receivable	(10,000)
		Less:	Decrease in Current Liabilities
			Trade Payables	(20,000)	(50,000)
	Net Cash from Operations				1,80,000
B.	Cash Flow from Investing Activities
		Proceeds from Sale of Fixed Assets			20,000
		Purchases of Fixed Assets			(2,80,000)
		Net Cash outflow from Investing activity			(2,60,000)
C.	Cash Flow from Financing Activities
		Issue of Shares			1,00,000
		Bank Loan Paid			(20,000)
		Dividend Paid			(60,000)
	Net Cash from Financing Activities				20,000
D.	Net Decrease in Cash and Cash Equivalents (A+B+C)				(60,000)
		Add:	Cash and Cash Equivalents in the beginning		90,000
E.	Cash and Cash equivalents at the end				30,000

Fixed Assets Account

Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
	Balance b/d		4,00,000		Bank		20,000
	Bank (Purchases- Balancing fig.)		2,80,000		Profit and Loss		10,000
					Accumulated Depreciation		50,000
					Balance c/d		6,00,000
			6,80,000				6,80,000

                                                             Accumulated Depreciation Account

Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
	Fixed Assets		50,000		Balance b/d		80,000
	Balance c/d		1,00,000		Profit and Loss (Balance fig.)		70,000
			1,50,000				1,50,000