Question

The Balance Sheet of Virendra Paper Ltd. as at 31st March, 2019 is given below:

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,20,000	6,00,000
(b) Reserves and Surplus:
Surplus i.e., Balance in Statement of Profit and Loss		4,80,000	3,75,000
2. Non-Current Liabilities
Long-term Borrowings:
10% Debentures		2,70,000	4,50,000
3. Current Liabilities
Trade Payables		1,20,000	90,000
Total		15,90,000	15,15,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)	1	7,50,000	7,20,000
2. Current Assets
(a) Inventories		3,60,000	4,20,000
(b) Trade Receivables		3,00,000	2,25,000
(c) Cash and Cash Equivalents		1,80,000	1,50,000
Total		15,90,000	15,15,000

Notes to Accounts

Particulars			31st March, 2019 (₹)	31st March, 2018 (₹)
1. Fixed Assets (Tangible)
Land			2,40,000	3,00,000
	31st March,	31st March,
	2019 (₹)	2018 (₹)
Plant and Machinery	7,50,000	6,00,000
Less:Accumulated Depreciation	2,40,000	1,80,000
	5,10,000	4,20,000	5,10,000	4,20,000
			7,50,000	7,20,000

Additional Information:
1. Interim Dividend of ₹75,000 has been paid during the year.
2. Debenture Interest paid during the year ₹ 27,000.
You are required to prepare Cash Flow Statement.

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 (4,80,000 – 3,75,000)	1,05,000
	Interim Dividend	75,000
	Profit Before Taxation	1,80,000
	Items to be Added:
	Interest Paid on Debentures	27,000
	Depreciation	60,000
	Operating Profit before Working Capital Adjustments	2,67,000
	Less: Increase in Current Assets
	Trade Receivables	(75,000)
	Add: Increase in Current Liabilities
	Trade Payables	30,000
	Add: Decrease in Current Assets
	Inventories	60,000
	Cash Generated from operations	2,82,000
	Less: Tax Paid	–
	Net Cash Flow from Operating Activities		2,82,000
B	Cash Flow from Investing Activities
	Sale of Land	60,000
	Purchase of Machinery	(1,50,000)
	Net Cash Used in Investing Activities		(90,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital	1,20,000
	Redemption of 10% Debentures	(1,80,000)
	Interim Dividend Paid	(75,000)
	Interest Paid on Debentures	(27,000)
	Net Cash Used in Financing Activities		(1,62,000)
D	Net Increase in Cash and Cash Equivalents		30,000
	Add: Cash and Cash Equivalent in the beginning of the period		1,50,000
	Cash and Cash Equivalents at the end of the period		1,80,000