Question

From the following Balance Sheet of Young India Ltd., prepare Cash Flow Statement:
 BALANCE SHEET OF YOUNG INDIA LTD.as at 31st March, 2019

Particular	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		2,50,000	2,00,000
(b) Reserves and Surplus: Surplus, i.e., Balance in Statement of Profit and Loss		1,83,000	82,000
2. Non-Current Liabilities
Long-term Borrowings:
15% Debentures		80,000	50,000
3. Current Liabilities
(a) Trade Payables		1,50,000	1,10,000
(b) Other Current Liabilities		12,000	20,000
Total		6,75,000	4,62,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible)		2,74,000	1,17,000
(b) Non-Current Investments		68,000	55,000
2. Current Assets
(a) Inventories		2,06,000	1,50,000
(b) Trade Receivables		32,000	70,000
(c) Cash and Cash Equivalents		95,000	70,000
Total		6,75,000	4,62,000

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 (1,83,000 – 82,000)	1,01,000
	Profit Before Taxation	1,01,000
	Items to be Added:
	Interest on Debentures	7,500
	Operating Profit before Working Capital Adjustments	1,08,500
	Less: Increase in Current Assets
	Inventories	(56,000)
	Add: Increase in Current Liabilities
	Trade Payables	40,000
	Less: Decrease in Current Liabilities
	Other Current Liabilities	(8,000)
	Add: Decrease in Current Assets
	Trade Receivables	38,000
	Cash Generated from Operations	1,22,500
	Less: Tax Paid	–
	Net Cash Flows from Operating Activities		1,22,500
B	Cash Flow from Investing Activities
	Purchase of Fixed Assets	(1,57,000)
	Purchase of Investments	(13,000)
	Net Cash Used in Investing Activities		(1,70,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Share Capital	50,000
	Proceeds from Issue of 15% Debentures	30,000
	Interest on Debentures (50,000 × 15%)	(7,500)
	Net Cash Flow from Financing Activities		72,500
D	Net Increase or Decrease in Cash and Cash Equivalents		25,000
	Add: Cash and Cash Equivalent in the beginning of the period		70,000
	Cash and Cash Equivalents at the end of the period		95,000

 Note: It has been assumed that Debentures were issued at the end of the accounting period. Therefore, interest on Debentures is computed on the opening balance of the Debenture.