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Question
Balance Sheet of Bright Ltd. as at 31st March, 2026 is as follows:
| Particulars | Note No. | 31st March, 2026 (₹) | 31st March, 2025 (₹) |
|---|---|---|---|
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholders’ Funds | |||
| (a) Share Capital | 2,00,000 | 2,00,000 | |
| (b) Reserves and Surplus: Surplus, i.e., Balance in Statement of Profit & Loss | 98,000 | 96,000 | |
| 2. Non-Current Liabilities | |||
| Long-term Borrowings | 1 | 90,000 | 50,000 |
| 3. Current Liabilities | |||
| (a) Short-term Borrowings (Loan from Bank) | ... | 10,000 | |
| (b) Trade Payables | 82,000 | 72,000 | |
| Total | 4,70,000 | 4,28,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| Property, Plant and Equipment and Intangible Assets: | |||
| - Property, Plant and Equipment | 2 | 3,42,000 | 3,00,000 |
| 2. Current Assets | |||
| (a) Inventories | 44,000 | 50,000 | |
| (b) Trade Receivables | 76,800 | 70,000 | |
| (c) Cash and Cash Equivalents | 7,200 | 8,000 | |
| Total | 4,70,000 | 4,28,000 |
Notes to Accounts
| Particulars | 31st March, 2026 (₹) | 31st March, 2025 (₹) | ||
|---|---|---|---|---|
| 1. Long-term Borrowings | ||||
| Loan from Aman Ltd. | 40,000 | ... | ||
| Loan from Bank | 50,000 | 50,000 | ||
| 90,000 | 50,000 | |||
| 2. Property, Plant and Equipment | 31.3.2026 (₹) | 31.3.2025 (₹) | ||
| (i) Land | 60,000 | 40,000 | ||
| (ii) Building | 1,10,000 | 1,00,000 | ||
| (iii) Machinery | 2,44,000 | 2,14,000 | ||
| Less: Accumulated Depreciation | 72,000 | 54,000 | 1,72,000 | 1,60,000 |
| 3,42,000 | 3,00,000 |
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Solution
Cash Flow Statement of Bright Ltd. for the year ended 31st March, 2026
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| A. Cash Flow from Operating Activities | ||
| Net Profit before Tax and Extraordinary Items (Working Note 1) | 54,000 | |
| Add: Non-Cash and Non-Operating Expenses | ||
| 1. Depreciation provided during the year (72,000 - 54,000) | 18,000 | |
| Operating Profit before Working Capital Changes | 72,000 | |
| Adjustments for Changes in Working Capital: | ||
| Add: Decrease in Inventories \[(50,000 - 44,000)\] | 6,000 | |
| Add: Increase in Trade Payables $(82,000 - 72,000)$ | 10,000 | |
| Less: Increase in Trade Receivables $(76,800 - 70,000)$ | (6,800) | 9,200 |
| Net Cash Flow from Operating Activities | 81,200 | |
| B. Cash Flow from Investing Activities | ||
| 1. Payment for Purchase of Land $(60,000 - 40,000)$ | (20,000) | |
| 2. Payment for Purchase of Building $(1,10,000 - 1,00,000)$ | (10,000) | |
| 3. Payment for Purchase of Machinery $(2,44,000 - 2,14,000)$ | (30,000) | |
| Net Cash Used in Investing Activities | (60,000) | |
| C. Cash Flow from Financing Activities | ||
| 1. Proceeds from raising Long-term Loan (from Aman Ltd.) | 40,000 | |
| 2. Repayment of Short-term Bank Loan $(0 - 10,000)$ | (10,000) | |
| 3. Interim Dividend paid during the year | (52,000) | |
| Net Cash Used in Financing Activities | (22,000) | |
| Net Decrease in Cash and Cash Equivalents (A + B + C) | (800) | |
| Add: Opening Balance of Cash & Cash Equivalents | 8,000 | |
| Closing Balance of Cash & Cash Equivalents | 7,200 |
Working Notes:
1. Calculation of Net Profit before Tax and Extraordinary Items:
Closing Balance of Surplus (Profit & Loss) = ₹ 98,000
Less: Opening Balance of Surplus (Profit & Loss) = (₹ 96,000)
Net Profit earned during the current year = ₹ 2,000
Add: Interim Dividend paid during the year = ₹ 52,000
Net Profit before Tax and Extraordinary Items = ₹ 54,000
2. Property, Plant and Equipment (Purchases):
Land: Increased from ₹ 40,000 to ₹ 60,000, signifying a purchase of ₹ 20,000.
Building: Increased from ₹ 1,00,000 to ₹ 1,10,000, signifying a purchase of ₹ 10,000.
Machinery (At Cost): Increased from ₹ 2,14,000 to ₹ 2,44,000, signifying a purchase of ₹ 30,000.
