Question

From the following Balance Sheet, prepare Cash Flow Statement:

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		2,50,000	2,00,000
(b) Reserves and Surplus,	1	90,600	80,500
2. Current Liabilities
(a) Short-term Borrowings: Bank Loan		-	70,000
(b) Trade Payables		1,35,200	1,50,000
(c) Short-term Provisions: Provision for Tax		35,000	30,000
Total Expenses		5,10,800	5,30,500
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets	2	3,59,000	3,50,000
(ii) Intangible Assets: Goodwill		5,000	-
2. Current Assets
(a) Inventories		74,000	1,00,000
(b) Trade Receivables		64,200	80,000
(c) Cash and Cash Equivalents		8,600	500
Total		5,10,800	5,30,500

Notes to Accounts

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
1. Reserves and Surplus
General Reserve	60,000	50,000
Surplus, i.e., Balance in Statement of Profit and Loss	30,600	30,500
	90,600	80,500
2. Tangible Assets
Land and Building	1,90,000	2,00,000
Plant and Machinery	1,69,000	1,50,000
	3,59,000	3,50,000

Additional Information:.

1. Proposed Dividend for the year ended 31st March, 2019 was ₹ 25,000 and for the year ended 31st March, 2018 was ₹ 14,000.
2. Interim Dividend paid during the year was ₹ 9,000.
3. Income Tax paid during the year was ₹ 28,000.
4. Machinery was purchased during the year ₹ 33,000.
5. Depreciation to be charged on machinery ₹ 14,000 and building ₹ 10,000.

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 (30,600 – 30,500)	100
	Proposed Dividend	23,000
	Transfer to General Reserve	10,000
	Provision for Taxation	33,000
	Profit Before Taxation		66,100
	Items to be Added:
	Depreciation on Machinery	14,000
	Depreciation on Building	10,000	24000
	Operating Profit before Working Capital Adjustments		90,100
	Add: Decrease in Current Assets
	Inventories	26,000
	Trade Receivables	15,800	41800
			1,31,900
	Less: Decrease in Current Liabilities
	Trade Payables		(14,800)
	Net Cash Generated from operations		1,17,100
	Less: Tax Paid		(28,000)
	Cash Flows from Operating Activities		89,100
B	Cash Flow from Investing Activities
	Purchase of Machinery	(33,000)
	Purchase of Goodwill	(5,000)
	Net Cash from (used in) Investing Activities		(38,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Shares	50,000
	Repayment of Bank Loan	(70,000)
	Dividend Paid	(23,000)
	Net Cash Used in Financing Activities		(43,000)
D	Net Increase in Cash and Cash Equivalents		8,100
	Add: Cash and Cash Equivalent in the beginning of the period		500
	Cash and Cash Equivalents at the end of the period		8,600

Working Notes:
WN 1:

Dr.	Machinery Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	1,50,000	By Depreciation	14,000
To Bank A/c (Purchases-Bal. Fig.)	33,000	By Balance c/d	1,69,000
	1,83,000		1,83,000

WN 2:

Dr.	Provision for Taxation Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Bank A/c (Tax Paid)	28,000	By Balance b/d	30,000
To Balance c/d	35,000	By Profit and Loss A/c (Bal. Fig.)	33,000
	63,000		63,000