Question

You are required to prepare a Cash Flow Statement (as per AS-3) for the year 2021-22 from the following Balance Sheets:

Balance Sheet of A.B.C. Ltd. As at 31st March, 2022 and 31st March, 2021.
Particulars	Note No.	31.3.2022 (₹)	31.3.2021 (₹)
I. EQUITY AND LIABILITIES:
1. Shareholders’ Funds:
(a) Share Capital (Equity Share Capital)		6,00,000	4,00,000
(b) Reserves and Surplus (Statement of P/L)		2,00,000	l,00,000
2. Non-Current Liabilities:
Long-term Borrowings		1,00,000	2,00,000
3. Current Liabilities:
(a) Short-term borrowings (Bank loan)		-	10,000
(b) Trade Payables (Creditors)		1,05,000	1,40,000
(c) Short-term Provisions (Provision for Tax)		70,000	40,000
Total		10,75,000	8,90,000
II. ASSETS:
1. Non-Current Assets:
(a) Property, Plant and Equipment and Intangible Assets
(i) Property, Plant and Equipment (Building)		6,00,000	6,00,000
(ii) Intangible Assets (Patents)		45,000	50,000
(b) Non-Current Investments		75,000	-
2. Current Assets:
(a) Inventory		15,000	10,000
(b) Trade Receivables (Debtors)		2,55,000	2,00,000
(c) Cash & Bank Balances		85,000	30,000
Total		10,75,000	8,90,000

Additional Information:

During the year 2021-22:

1. Building costing ₹ 75,000 was purchased.
2. An old building, the book value of which was ₹ 63,000, was sold at a loss of ₹ 5,000.
3. Tax provided during the year was ₹ 80,000.
4. Proposed dividend for the year ended 31^st March, 2021, was 20% and for the year ended 31^st March, 2022, was 10%.

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		1,20,000
Add:
Loss on Sale of Building	5,000
Depreciation on Building	12,000	17,000
Operating Profit before Working Capital Changes		1,37,000
Less:
Decrease in Trade Payables	(35,000)
Increase in Inventories	(5,000)	(40,000)
Add:
Increase in Short-term Provisions	30,000
Decrease in Trade Receivables	45,000	75,000
Cash Generated from Operations		1,72,000
Less: Income Tax Paid		(35,000)
Net Cash from Operating Activities (A)		1,37,000
B. Cash Flow from Investing Activities:
Less: Purchase of Building	(75,000)
Add: Sale of Old Building	55,000	(20,000)
Other Investing Outflows (balancing figure)		(72,000)
Net Cash used in Investing Activities (B)		(92,000)
C. Cash Flow from Financing Activities:
Less: Repayment of Long-term Borrowings	(1,00,000)
Add: Proceeds from Short-term Borrowings	1,00,000	Nil
Other Inflows (balancing figure)		10,000
Net Cash from Financing Activities (C)		10,000
Net Increase in Cash & Cash Equivalents (A + B + C)		55,000
Opening Cash & Bank Balances (31.03.2021)		30,000
Add: Net Increase in Cash & Cash Equivalents		55,000
Closing Cash & Bank Balances (31.03.2022)		85,000