Question

Prepare a Cash-Flow Statement from the following Balance Sheets of Dry Fruits Ltd.:

Particulars	Note No.	31.3.2022 (₹)	31.3.2021 (₹)
I. EQUITY AND LIABILITIES:
(1) Shareholders’ Funds:
(a) Share Capital		2,00,000	2,00,000
(b) Reserve and Surplus	1	84,000	(8,000)
(2) Non-Current Liabilities:
Long-term Borrowings	2	1,35,000	1,00,000
(3) Current Liabilities:
Trade Payables		68,000	62,000
TOTAL		4,87,000	3,54,000
II. ASSETS:
(1) Non-Current Assets:
(a) Property, Plant and Equipment and Intangible Assets
(i) Property, Plant and Equipment	3	1,20,000	1,30,000
(2) Current Assets:
(a) Current Investments (Marketable Securities)		22,000	15,000
(b) Inventories		61,000	80,000
(c) Trade Receivables		40,000	29,000
(d) Cash & Bank		2,44,000	1,00,000
TOTAL		4,87,000	3,54,000

Notes:

	31.3.2022 (₹)	31.3.2021 (₹)
(1) Reserve & Surplus:
General Reserve	24,000	-
Profit & Loss Balance	60,000	(8,000)
	84,000	(8,000)
(2) Long-term Borrowings:
12% Mortgage Loan	1,35,000	1,00,000
(3) Property, Plant and Equipment:
Machinery	1,45,000	1,60,000
Less: Accumulated Depreciation	25,000	30,000
	1,20,000	1,30,000

Additional Information:

1. Interest paid on mortgage loan amounted to ₹ 14,100.
2. Interim Dividend paid during the year ₹ 20,000.
3. Machinery costing ₹ 40,000 (accumulated depreciation thereon being ₹ 18,000 was sold for ₹ 5,000.

Answer 1

Cash Flow Statement for the year ended 31st March, 2022
Particulars	Amount (₹)	Amount (₹)
A. Cash Flow from Operating Activities:
Net profit before tax		1,12,000
Adjustments for non-cash and non-operating items:
Add:
Interest paid on mortgage loan	14,100
Loss on sale of machinery	17,000
Depreciation	13,000	44,100
Operating profit before working capital changes		1,56,100
Add: Decrease in Current Assets
Inventory	19,000
Add: Increase in Current Liabilities:
Trade Payables	6,000	25,000
		1,81,100
Less: Increase in Current Assets:
Trade Receivables	(11,000)	(11,000)
Net Cash from Operating Activities (A)		1,70,100
B. Cash Flow from Investing Activities:
Purchase of Machinery	(25,000)
Sale of Building	5,000	(20,000)
Net Cash from Investing Activities (B)		(20,000)
C. Cash Flow from Financing Activities:
Proceeds of a 12% mortgage loan	35,000
Interest paid on a mortgage loan	(14,100)
Interim Dividend paid	(20,000)	900
Net Cash from Financing Activities (C)		900
Net Decrease in Cash and Cash Equivalents (A + B + C)		1,51,000
Add: Cash and Cash Equivalents at the beginning of the period.		1,15,000
Cash and Cash equivalents at the end of the period		2,66,000

Working Note 1:

Dr.	Machinery Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance B/d	1,60,000	By Bank A/c (sale)	5,000
To Bank A/c (B/f)	25,000	By Accumulated Dep. A/c	18,000
		By Statement of P&L A/c	17,000
		By Balance c/d	1,45,000
	1,85,000		1,85,000

Working Note 2: Calculation of Net profit before tax.

Particulars	Amount (₹)
Profit and Loss Balance on 31st March, 2018	60,000
Less: Profit & Loss Balance 31st March, 2017	8,000
	68,000
Add:
Transfer to General Reserve	24,000
Interim Dividend paid	20,000
Net Profit before Tax	1,12,000