Question

From the following Balance Sheet of Gopal Ltd. and the additional information as at 31^st March, 2019, prepare a Cash Flow statement when cash flows from financing activities is ₹ 2,32,000.

Gopal Ltd. Balance Sheet as at 31.2.2019
	Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I.	Equity and Liabilities:
	1. Shareholder’s Fund
	(a) Share Capital		10,00,000	8,00,000
	(b) Reserve and Surplus	1	4,00,000	(1,00,000)
	2. Non Current Liabilities
	Long term-Borrowings	2	9,00,000	9,00,000
	3. Current Liabilities
	(a) Short term Borrowings	3	2,40,000	1,00,000
	(b) Short term Provisions	4	2,00,000	1,75,000
	Total		27,40,000	18,75,000
II	Assets:
	1. Non-Current Assets
	(a) Fixed Assets
	(i) Tangible Assets	5	20,00,000	14,42,000
	(ii) Intangible Assets	6	46,000	58,000
	(b) Non-current Investments		1,00,000	45,000
	2. Current Assets:
	(a) Current Investments		2,00,000	1,20,000
	(b) Inventories	7	2,14,000	90,000
	(c) Cash and Cash equivalents		1,80,000	1,20,000
	Total		27,40,000	18,75,000

Notes to Accounts:

Note	Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
1.	Reserve and Surplus
	Surplus (Balance in Statement of Profit and Loss)	4,00,000	(1,00,000)
2.	Long term Borrowings
	12% debentures	9,00,000	9,00,000
3.	Short term Borrowings
	Bank overdraft	2,40,000	1,00,000
4.	Short term provisions
	Provisions for tax	2,00,000	1,75,000
5.	Tangible Assets
	Machinery	24,00,000	16,42,000
	Less: Accumulated Depreciation	(4,00,000)	(2,00,000)
		20,00,000	14,42,000
6.	Intangible Assets
	Goodwill	46,000	58,000
7.	Inventories
	Stock in trade	2,14,000	90,000

Additional Information:

Tax ₹ 1,50,000 was paid during the year.

Answer 1

Gopal Ltd. Cash Flow Statement for the year ending 31st March, 2019
Particulars	Details (₹)	Net (₹)
(A) Cash flow from operating activities:
Profit before tax and extra ordinary items:		6,75,000
Surplus	5,00,000
Add: Provision for tax made	1,75,000
Adjustment for:		3,20,000
Add: Goodwill written off	12,000
Add: Depreciation on machinery	2,00,000
Add: Interest on debentures (9,00,000 × 12%)	1,08,000
Operating profit before working capital changes		9,95,000
Less: Increase in inventories		(1,24,000)
Net Cash used in operations		8,71,000
Less: Tax paid		(1,50,000)
Net Cash flow from operating activities		7,21,000
(B) Cash flow from investing activities:
Purchases of machinery	(7,58,000)
Purchase of non-current investment	(55,000)
Net Cash used in investing activities		(8,13,000)
(C): Net Cash flow from financing activities		2,32,000
(D): Net Cash increase in cash and cash equivalents		1,40,000
(E): Opening cash and cash equivalents		2,40,000
(F): Closing cash and cash equivalents		3,80,000