Question

From the following Balance Sheets of Sonam Ltd as on 31-3-2012 and 31-3-2011.

Prepare a Cash Flow Statements:  

Liabilities	31-3-2011 Rs	31-3-2011 Rs	Assets	31-3-2011 Rs	31-3-2011 Rs
Equity Shares Capital Profit and Loss Account Bank Loan Proposed Dividend Provision for tax Creditors	1,00,000   25,000   50,000 20,000   10,000 15,000	1,50,000   50,000   25,000 15,000   17,500 11,250	Patents Building Investment Debtors Stock Cash	12,500 1,50,000 - 50,000 2,500 5,000	11,250 1,50,000 18,750 63,750 3,750 21,250
	2,20,000	2,68,750		2,20,000	2,68,750

 

Additional Information:

During the year a Building having book value Rs 50,000 was sold at a loss of Rs 2,000 and deprecation charged on Building was Rs 4,000

Answer 1

                    Cash Flow Statement Activities 

	Particulars				Amount Rs	Amount Rs
	Cash Flow from Operating Activities
	Profit during the year				25,000
	Proposed Dividend				15,000
	Provision for Taxation				17,500
	Profit before Taxation				57,500
	Items to be adjusted:
		Add:	Depreciation		4,000
		Add:	Loss on Sale of Assets		2,000
		Add:	Patents Written-off		1,250
	Operating Profit before Working Capital Changes				64,750
		Less:	Increase in Debtors		(13,750)
		Less:	Increase in Stock		(1,250)
		Less:	Decrease in Creditors		(3,750)
	Profit from operation before Tax paid				46,000
		Less:	Tax paid		10,000
	Cash from Operating Activities				36,000	36,000
	Cash Flow from Investing Activities
		Proceeds from Sale of Building			48,000
		Less:	Purchase of Building		(54,000)
		Less:	Purchase of Investment		(18,750)
	Cash used in Investing Activities				(24,750)	(24,750)
	Cash Flow from Financing Activities
	Proceeds from Issue of Share				50,000
		Less:	Repayment of loan		(25,000)
		Less:	Dividend Paid		(20,000)
	Cash from Financing Activities				5,000	5,000
	Net Increase in Cash and Cash Equivalents					16,250
		Add:	Cash at the beginning			5,000
	Cash at the end					21,250