Question

From the following Balance Sheets of Kiosk Ltd. you are required to prepare a Cash Flow Statement (As per AS 3) for the period ended 2024-25.

Balance Sheets of Kiosk Ltd. As at 31st March, 2025 and 31st March, 2024
Particulars	Note No.	31.3.2025 (₹)	31.3.2024 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital		8,50,000	5,50,000
(b) Reserves and Surplus (Statement of P/L)		1,80,000	1,00,000
2. Non-Current Liabilities
Long-term Borrowings (8% Debentures)		50,000	2,00,000
3. Current Liabilities
(a) Short-term borrowings (Bank Overdraft)		1,25,000	1,15,000
(b) Short-Term Provisions (Provision for tax)		95,000	1,35,000
TOTAL		13,00,000	11,00,000
II. ASSETS
1. Non-Current Assets:
Property, Plant & Equipment & Intangible Assets
(i) Property, Plant & Equipment		7,50,000	5,50,000
(ii) Intangible assets (Patent)		1,40,000	85,000
2. Current Assets
(a) Current Investments		65,000	1,45,000
(b) Trade Receivables		1,95,000	2,05,000
(c) Cash & Bank Balances (Cash at Bank)		1,50,000	1,15,000
TOTAL		13,00,000	11,00,000

Notes to Accounts:

Particulars	31.3.2025 ₹	31.3.2024 ₹
1) Property, plant and equipment	8,15,000	5,85,000
Accumulated depreciation	(65,000)	(35,000)

Additional Information:

1. A Machinery costing ₹ 30,000 (depreciation provided thereon ₹ 10,000) was sold at a loss of ₹ 3,000.
2. Tax provided for the year 2024-25 ₹ 32,000.
3. 8% Debentures were redeemed on 31.3.2025.
4. Interest received on current investments was ₹ 2,500.

Answer 1

Cash Flow statement For the period ended 31.3.2025
Particulars	Amount ₹	Amount ₹
a) Cash flow from operating activities:
Net profit before tax	1,12,000
Adjustment for non-cash & non-operating items;
Loss on sale of machinery	3,000
Depreciation on machinery	40,000
Interest on debentures	16,000
Interest on current investment	(2,500)
Net operating profit before working capital change	1,68,500
Changes in working capital:
Add: Current investment	80,000
Trade receivable	10,000
Cash generated from Operating Activities	2,58,500
Less: Tax paid	(72,000)
Net cash flow from Operating Activities		1,86,500
b) Cash flow from investing activities:
Purchase of machinery	(2,60,000)
Patent acquired	(55,000)
Sale of machinery	17,000
Interest received	2,500
Net Cash used in Investing Activities		(2,95,500)
c) Cash flow from Financing Activities:
Issue of shares	3,00,000
Redemption of debentures	(1,50,000)
Bank overdraft	10,000
Interest paid on debentures	(16,000)
Net Cash flow from Financing Activities		1,44,000
Increase in cash & cash equivalent		35,000
Opening cash & cash equivalent		1,15,000
Closing cash & cash equivalent		1,50,000

Working Note:

(1)

Particulars	₹
Net profit/loss as per statement of profit and loss	80,000
Provision for tax	32,000
Net profit before tax	1,12,000

(2)

Dr.	Provision for tax A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Bank	72,000	By Balance b/d	1,35,000
To balance c/d	95,000	By Statement of P/L	32,000
	1,67,000		1,67,000

(3)

Dr.	Machinery A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	5,85,000	By Accumulated depreciation	10,000
To Bank A/c	2,60,000	By Bank A/c	17,000
		By Loss on sale of mach	3,000
		By Balance c/d	8,15,000
	8,45,000		8,45,000

(4)

Dr.	Accumulated Depreciation A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Machinery A/c	10,000	By Balance b/d	35,000
To Balance c/d	65,000	By Depreciation	40,000
	75,000		75,000