Question

From the following Balance Sheet of JY Ltd. as at 31^st March 2017, prepare a Cash Flow Statement:

Balance sheet as at 31st March, 2017
Particular	Note No.	31st March, 2017 (₹)	31st March, 2016 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		5,00,000	5,00,000
(b) Reserves and Surplus	1	1,00,000	25,000
2. Non-Current Liabilities
Long-term Borrowings	2	2,50,000	1,50,000
3. Current Liabilities
(a) Short-term Borrowings	3	1,50,000	1,10,000
(b) Short-term Provisions	4	1,25,000	75,000
Total		11,25,000	8,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets–Tangible	5	6,00,000	4,50,000
2. Current Assets
(a) Trade Receivables		2,75,000	2,25,000
(b) Cash and Cash Equivalents		50,000	25,000
(c) Short-term Loans and Advances		2,00,000	1,00,000
Total		11,25,000	8,00,000

Notes to Accounts

Particular		31st March, 2017 (₹)	31st March, 2016 (₹)
1.	Reserves and Surplus
	Surplus, i.e., Balance in Statement of Profit and Loss	1,00,000	(25,000)
		1,00,000	(25,000)
2.	Long-term Borrowings
	10% Debentures	2,50,000	1,50,000
		2,50,000	1,50,000
3.	Short-term Borrowings
	Bank Overdraft	1,50,000	1,00,000
		1,50,000	1,00,000
4.	Short-term Provisions
	Provision for Tax	1,25,000	75,000
		1,25,000	75,000
5.	Tangible Assets
	Machinery	7,37,500	5,25,000
	Accumulated Depreciation	(1,37,500)	(75,000)
		6,00,000	4,50,000

Note: Proposed Dividend for the years ended 31st March, 2016 and 2017 are ₹ 50,000 and ₹ 75,000, respectively.

Additional Information: 
₹ 1,00,000, 10% Debentures were issued on 31st March, 2017.

Answer 1

Cash flow statement for the year ended 31st March, 2017
Particulars	Amount (₹)	Amount (₹)
A) Cash flow from Operating Activities
Profit as per statement of profit and loss (1,00,000 + 25,000)		1,25,000
Add: Non-Cash Items:
1. Depreciation	62,500
2. Intrest	15,000
3. Proposed Dividend	50,000
4. Provision for tax	1,25,000	2,52,500
Operating Profit		3,77,500
Less: Increase in current assets
1. Trade Receivables		(50,000)
Cash generated from operation		3,27,500
Less: Tax paid		(75,000)
Cash flow from Operating Activities		2,52,500
B) Cash flow from Investing Activities
1. Purchase of tangible assets	2,12,500
2. Short-term loans and advances	(1,00,000)
Cash used in Investing Activities		3,12,500
C) Cash flow from financing activities
1. Proceeds from long-term borrowings	1,00,000
2. Intrest Paid	(15,000)
3. Bank Overdraft	50,000
4. Divident Paid	(50,000)
Cash flow from financing activities		85,000
D) Net increase or decrease in Cash and Cash Equivalents (A − B + C) (2,52,500 − 3,12,500 + 85,000)		25,000
Add: Cash and Cash Equivalents in the beginning		25,000
Cash and Cash Equivalents at the end		50,000