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Solution - Concept of Cash Flow Statement

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Question

Does movement between items that constitute cash or cash equivalents result into cash flow? Give reason in support of your answer.

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Prepare a Cash Flow Statement from the information given in the balance sheet of live Ltd. as at 31-3-2013and 31-3-2012:

ParticularsNote No.31-3-2015 (Rs.)31-3-2014 (Rs.)

I. Equity and Liabilities

        1. Shareholder’s Funds

              a. Equity Share Capital

              b. Reserve and Surplus

         2. Non - Current Liabilities

              a) Long term borrowings

         3. Current Liabilities

              a) Trade Payables

1

 

 

2,10,000

1,32,000

 

1,50,000

 

75,000

 

 

1,80,000

24,000

 

1,50,000

 

27,000

Total 5,67,0003,81,000

II. Assets

     1. Non – Current Assets

               a) Fixed Assets

                     Tangible assets

               b) Non – Current Investments

      2. Current Assets

                a) Current Investments (marketable)

                b) Inventories

                c) Trade Receivable

                c) Cash and Cash equivalents

 

 

 

 

2,94,000

48,000

 

54,000

1,07,000

40,000

24,000

 

 

 

2,52,000

18,000

 

60,000

24,000

17,500

9,500

Total 5,67,0003,81,000

 

Notes to Account:

Note -1

Particulars2013 (Rs.)2012 (Rs.)

Reserve and Surplus

Surplus (balance in statement of profit and loss)

 

1,32,000

 

24,000

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State the objective of preparing ‘Cash Flow statement’.

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L Ltd. had purchased machinery on deferred payment basis. During the year ended 31-3-2015 the company paid an installment of Rs.4,00,000 which included interest of Rs.4,000. Under which activity or activities payment of installment will be classified while preparing Cash flow Statement.

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Following is the Balance Sheet of K K Ltd as at 31-3-2015:

                                                          K.K. Ltd Balance Sheet as at 31-3-2015

ParticularsNote No.31-3-2015 (Rs.)31-3-2014 (Rs.)

I. Equity and Liabilities

        1. Shareholder’s Funds

              a. Share Capital

              b. Reserve and Surplus

         2. Non - Current Liabilities

              a) Long – term borrowings

         3. Current Liabilities

              a) Short – term borrowings

              b)Short – term provisions

 

 

 

1

 

2

 

3

4

 

 

10,00,000

4,00,000

 

9,00,000

 

3,00,000

1,40,000

 

 

8,00,000

(1,00,000)

 

10,00,000

 

1,00,000

1,80,000

Total 27,40,00019,80,000

II. Assets

     1. Non – Current Assets

               a) Fixed Assets

                     Tangible assets

                     Intangible assets

               b) Non – Current Investments

      2. Current Assets

                a) Current Investments

                b) Inventories

                c) Cash and Cash

 

 

 

5

6

 

 

 

7

 

 

 

 

20,06,000

40,000

2,00,000

 

1,00,000

2,14,000

1,80,000

 

 

 

14,40,000

60,000

1,50,000

 

1,20,000

90,000

1,20,000

Total 27,40,00019,80,000

 

Note NoParticulars31-3-2015(Rs.)31-3-2014(Rs.)

1.

 

Reserve and Surplus

(Surplus i.e. Balance in Statement of Profit and Loss)

 

4,00,000

 

(1,00,000)

  4,00,000(1,00,000)

2.

 

Long term borrowings :

12 % Debentures

 

9,00,000

 

10,00,000

  9,00,00010,00,000

3.

 

Short – term borrowings :

Bank Overdraft

 

3,00,000

 

1,00,000

  3,00,0001,00,000

4.

 

Short – term provisions

Provisions for tax

 

1,40,000

 

1,80,000

  1,40,0001,80,000

5.

 

 

Tangible Assets

Machinery

Accumulated Depreciation

 

24,06,000

(4,00,000)

 

16,42,000

(2,02,000)

  20,06,00014,40,000

6.

 

Intangible Assets

Goodwill

 

40,000

 

60,000

  40,00060,000

7.

 

Inventories

Stock in trade

 

2,14,000

 

90,000

  2,14,00090,000

Additional Information

(i) 12% Debentures were redeemed on 31-3-2015

(ii) Tax 1,40,000 was paid during the year

Prepare Cash flow Statement.

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Give the meaning of ‘Cash Equivalents’ for the purpose of preparing Cash Flow Statement.

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Solution for concept: Concept of Cash Flow Statement. For the courses 12th CBSE (Arts), 12th CBSE (Commerce), 12th CBSE (Science)
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