Question

Following is the summarised Balance Sheet of Philips India Ltd. as at 31st March 2018:

Particulars	Note No.	31st March, 2018 (₹)	31st March, 2017 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		13,50,000	13,50,000
(b) Reserves and Surplus	1	11,34,000	10,68,000
2. Non-Current Liabilities
Long-term Borrowings: 10% Mortgage Loan		8,10,000	...
3. Current Liabilities
(a) Trade Payables (Creditors)		4,20,000	5,04,000
(b) Short-term Provisions:
Provision for Tax		30,000	2,25,000
Total		37,26,000	31,47,000
II. ASSETS
1, Non-Current Assets
(a) Fixed Assets (Tangible)		9,60,000	12,00,000
(b) Non-Current Investments		1,80,000	1,50,000
2. Current Assets
(a) Current Investments		21,000	17,000
(b) Inventories		63,30,000	7,82,000
(c) Trade Receivables		13,65,000	6,30,000
(c) Cash and Cash Equivalents		5,70,00	4,30,000
Total		37,26,000	31,47,000

Notes to Accounts

Particulars	31st March, 2018 (₹)	31st March, 2017 (₹)
I. Reserves and Surplus
General Reserve	9,30,000	9,00,000
Surplus, i.e., Balance in Statement of Profit and Loss	2,04,000	1,68,000
	11,34,000	10,68,000

Additional Information:
1. Investments costing ₹ 24,000 were sold during the year for ₹ 25,5000.
2. Provistion for Tax made during the year was ₹ 27,000.
3. During the year, a part of the Fixed Assets costing ₹ 30,000 was sold for ₹ 36,000. The rofits were included in the Statement of Profit and Loss.
4. The Interim Dividend paid during the year amounted to ₹ 1,20,000.
You are required to prepare Cash Flow Statement.

Answer 1

Cash Flow Statement for the year ended March 31, 2018
	Particulars	Amount (Rs)	Amount (Rs)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (2,04,000 – 1,68,000)	36,000
	Transfer to General Reserve	30,000
	Interim Dividend	1,20,000
	Provision for Taxation	27,000
	Profit Before Taxation	2,13,000
	Items to be Added:
	Depreciation	2,10,000
	Profit on Sale of Investments	(1,500)
	Profit on Sale of Fixed Assets	(6,000)
	Operating Profit before Working Capital Adjustments	4,15,500
	Less: Increase in Current Assets
	Trade Receivables	(7,35,000)
	Less: Decrease in Current Liabilities
	Trade Payables	(1,02,000)
	Add: Decrease in Current Assets
	Inventories	90,000
	Cash Generated from Operations	(3,31,500)
	Less: Tax Paid	(2,22,000)
	Net Cash from (used in) Operating Activities		(5,53,500)
B	Cash Flow from Investing Activities
	Sale of Investments	25,500
	Sale of Fixed Assets	36,000
	Purchase of Investments	(54,000)
	Net Cash Flow from Investing Activities		7,500
C	Cash Flow from Financing Activities
	Proceeds from Issue of 10% Mortgage Loan	8,10,000
	Interim Dividend Paid	(1,20,000)
	Net Cash Flow from Financing Activities		6,90,000
D	Net Increase in Cash and Cash Equivalents		1,44,000
	Add: Cash and Cash Equivalent in the beginning of the period		4,47,000
	Cash and Cash Equivalents at the end of the period		5,91,000

Working Notes:
WN1

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	12,00,000	Bank A/c  (Sale)	36,000
Profit and Loss A/c (Profit on Sale)	6,000	Depreciation (Bal. Fig.)	2,10,000
		Balance c/d	9,60,000
	12,06,000		12,06,000

WN2

Investments Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	1,50,000	Bank A/c (Sale)	25,500
Profit and Loss A/c (Profit on Sale)	1,500	Balance c/d	1,80,000
Bank A/c (Purchases- Bal. Fig.)	54,000
	2,05,500		2,05,500

WN 3

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Bank A/c (Tax Paid- Bal. Fig.)	2,22,000	Balance b/d	2,25,000
Balance c/d	30,000	Profit and Loss A/c	27,000
	2,52,000		2,52,000