Advertisements
Advertisements
प्रश्न
Read the following information of Celestial Ltd., and answer the questions that follow:
| Statement of Profit and Loss for the year ended 31st March 2024 | ||
| Particulars | Note No. | (₹) |
| Revenue from Operations | 10,00,000 | |
| Other Income | 1 | 40,000 |
| Total Revenue | 10,40,000 | |
| Expenses: | ||
| Employee Benefit Expenses | 1,60,000 | |
| Depreciation and Amortisation Expenses | 2 | 60,000 |
| Finance Cost | 3 | 50,000 |
| Other Expenses | 2,20,000 | |
| Total Expenses | 4,90,000 | |
| Profit before Tax | 5,50,000 | |
| Less Provision for Tax | (2,00,000) | |
| Profit after Tax | 3,50,000 | |
Notes to Accounts:
| Particulars | (₹) |
| 1. Other Income | |
| Interest on Short-term Loans and Advances | 1,00,000 |
| (including interest accrued ₹10,000) | |
| 2. Depreciation and Amortisation Expenses: | |
| Depreciation on Plant & Machinery | 60,000 |
| 3. Finance Cost | |
| Interest on Debentures (including outstanding interest ₹ 20,000) | 50,000 |
Additional information:
1) During the year 2023-24, the company paid tax of ₹ 2,50,000.
2) An extract of the Balance Sheets of the company as at 31st March 2023, and as at 31st March 2024 is as follows:
| Particulars | 31st March 2024 (₹) | 31st March 2023 (₹) |
| Plant & Machinery (At Gross Value) | 19,00,000 | 16,00,000 |
| Accumulated Depreciation | 4,00,000 | 5,00,000 |
| Short-term Loans and Advances | 5,00,000 | 6,50,000 |
- State the reason for a part of the accumulated depreciation being written off by the company. [1]
- What is the cash flow of interest on debentures? [1]
- Calculate Cash from Investing Activities. [1.5]
- Calculate Cash from Operating Activities. [2.5]
Advertisements
उत्तर
i. A part of the accumulated depreciation was written off due to disposal/sale of a part of Plant and Machinery during the year. When an asset is sold, the accumulated depreciation related to that asset is removed from the books.
ii. Cash Flow of Interest on Debentures
Interest on debentures (as per P&L) = ₹ 50,000
Outstanding interest included = ₹ 20,000
Cash paid for interest
= 50,000 − 20,000
= ₹ 30,000
iii. Cash Flow from Investing Activities
Working Note:
| Purchase of Plant & Machinery | |
| Particulars | Amount (₹) |
| Gross value on 31-3-2024 | 19,00,000 |
| Gross value on 31-3-2023 | 16,00,000 |
| Increase (Purchase) | 3,00,000 |
Cash Flow from Investing Activities
| Particulars | ₹ |
| Purchase of Plant & Machinery | (3,00,000) |
| Net Cash used in Investing Activities | (3,00,000) |
iv. Cash Flow from Operating Activities
Profit before Tax = ₹ 5,50,000
Adjust for Non-Cash & Non-Operating Items
| Adjust for Non-Cash & Non-Operating Items | |
| Particulars | ₹ |
| Profit before Tax | 5,50,000 |
| Add: Depreciation | 60,000 |
| Add: Interest on Debentures | 50,000 |
| Less: Interest Income | (40,000) |
| Operating Profit before Working Capital Changes | 6,20,000 |
Adjust for Working Capital Changes
Short-term loans & advances:
Decrease = 6,50,000 − 5,00,000
= ₹1,50,000 (inflow)
Add: Decrease in current assets 1,50,000
Tax paid during the year = ₹ 2,50,000
Cash Flow from Operating Activities
= 6,20,000 + 1,50,000 − 2,50,000
= ₹ 5,20,000
