Question

From the following Balance Sheets of Tiger Super Steel Ltd., prepare a Cash Flow Statement:

Balance Sheet of Tiger Super Steel Ltd. as at 31st March 2014 and 31st March 2017
Particulars	Note No.	March 31, 2017 (Rs.)	March 31, 2016 (Rs.)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital	1	1,40,000	1,20,000
b) Reserves and surplus	2	38,400	26,400
2. Current Liabilities
a) Trade payables	2	21,200	14,000
b) Other current liabilities	3	2,400	3,200
c) Short-term provisions	4	12,800	11,200
		2,14,800	1,74,800
II) Assets
1. Non-Current Assets
a) Fixed assets
i) Tangible assets	6	96,400	76,000
ii) Intangible assets		18,800	24,000
b) Non-current investments		14,000	4,000
2. Current Assets
a) Inventories		31,200	34,000
b) Trade receivables		43,200	30,000
c) Cash and Cash Equivalents		11,200	6,800
		2,14,800	1,74,800

Notes to accounts:

	2017	2016
1. Share Capital
Equity share capital	1,20,000	80,000
10% Preference share capital	20,000	40,000
	1,40,000	1,20,000
2. Reserves and surplus
General reserve	12,000	8,000
Balance in statement of profit and loss	26,400	18,400
	38,400	26,400
3. Trade payables
Bills payable	21,200	14,000
4. Other current liabilities
Outstanding expenses	2,400	3,200
5. Short-term provisions
Provision for taxation	12,800	11,200
6. Tangible assets
Land and building	20,000	40,000
Plant	76,400	36,000
	96,400	76,000

Additional Information:

*Proposed dividend for 2016-17 is Rs. 15,600 and for 2015-16 is Rs. 11,200.

Depreciation Charge on Land & Building Rs. 20,000, and Plant Rs. 10,000 during the year. Proposed dividend for 2016-17 Rs. 15,600 and for 2015-16 Rs. 11,200.

Answer 1

Cash Flow Statement
Particulars		Amount (Rs.)	Amount (Rs.)
A.	Cash flow from operating activities
	Profit earned during the year	8,000
	Add: General reserve	4,000
	Proposed dividend (Previous year 2016)	11,200
	Provision for taxation (Current Year 2017)	12,800
	Net profits before taxation and extraordinary items		36,000
	Adjustments
	Depreciation on land and building	20,000
	Depreciation on plant	10,000
	Goodwill written off	5,200	35,200
	Operating profit before working capital changes		71,200
	(+) Decrease in Current Assets
	Inventories	2,800
	(-) Increase in Current Assets
	Trade receivables	(13,200)
	(-) Decrease in Current Liabilities
	Outstanding expenses	(800)
	(+) Increase in Current Liabilities
	Bills payable	7,200	(4,000)
	Net cash from operations		67,200
	Less: Income tax paid		(11,200)
	Net cash from operating activities		56,000
B.	Cash Flow from Investing Activities
	Purchase of plant	(50,400)
	Purchase of Investment	(10,000)
	Net cash outflow from Investing Activities		(60,400)
C.	Cash Flow from Financing Activities
	Issue of shares	40,000
	Redemption of 10% Preference Shares	(20,000)
	Dividend paid	(11,200)
	Net cash from Financing Activities		8,800
D.	Net increase in Cash and cash equivalents (A+ B + C)		4,400
	(+) Cash and cash equivalents at the beginning		6,800
E.	Cash and cash equivalents at the end of the period		11,200

Working Notes:

Dr.	Plant Account		Cr.
Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Balance b/d	36,000	By Depreciation Charged	10,000
To Bank A/c (Purchase - Balancing Fig.)	50,400	By Balance c/d	76,400
	86,400		86,400