Question

From the following information, prepare a Cash-Flow Statement:

	₹
Increase in Equity Share Capital	40,000
Interim Dividend paid during the year	17,500
Transfer to General Reserve	2,000
Purchase of Building	33,250

Additional Information:

	31-3-2021 (₹)	31-3-2022 (₹)
Cash at Bank	25,000	37,500
Trade Receivables	75,000	90,000
Trade Payables	50,000	37,500
Outstanding Wages	22,500	16,250
Profit & Loss Balance	42,000	79,500

Answer 1

Cash Flow Statement for the year ended 31‑03‑2022
Particulars	Amount (₹)	Amount (₹)
A. Cash flow from Operating Activities:
Net profit for the year (WN‑1)		57,000
Adjust for Working‑capital changes:
Less:
Trade receivables	(15,000)
Trade payables	(12,500)
Outstanding wages	(6,250)	(33,750)
Net cash from Operating Activities (A)		23,250
B. Cash flow from Investing Activities:
Purchase of a building		(33,250)
Net cash used in Investing Activities (B)		(33,250)
C. Cash flow from Financing Activities:
Increase in equity share capital		40,000
Less: Interim dividend paid		(17,500)
Net cash from Financing Activities (C)		22,500
Net increase in Cash & Cash Equivalents (A+B+C)		12,500
Add: Opening cash at bank (31‑03‑2021)		25,000
Closing cash at bank (31‑03‑2022)		37,500

Working Note (WN‑1): Calculation of Profit for the year.

Change in P & L balance = 79,500 − 42,000 = 37,500

Add: Interim dividend paid = 17,500

Add: Transfer to General Reserve = 2,000

∴ Net profit for the year = 57,000