Question

Following are the Balance Sheets of Quick Gains Ltd.:

Particulars	Note No.	31.3.2024 (₹)	31.3.2023 (₹)
I. EQUITY AND LIABILITIES:
(1) Shareholders’ Funds:
(a) Share Capital		2,00,000	2,00,000
(b) Reserve and Surplus		l,25,000	20,000
(2) Non-Current Liabilities:
Long-term Borrowings		75,000	50,000
(3) Current Liabilities:
(a) Trade Payables		64,000	90,000
(b) Short-term Provisions (Provision for Tax)		15,000	10,000
TOTAL		4,79,000	3,70,000
II. ASSETS:
(1) Non-Current Assets:
(a) Property, Plant and Equipment and Intangible Assets
(i) Property, Plant and Equipment	1	3,23,000	1,84,000
(2) Current Assets:
(a) Inventory		72,000	50,000
(b) Trade Receivables		51,000	75,000
(c) Cash & Bank Balances		33,000	59,000
(d) Other Current Assets	2		2,000
TOTAL		4,79,000	3,70,000

Notes:

	31.3.2024 (₹)	31.3.2023 (₹)
(1) Property, Plant and Equipment (Machinery):	3,75,000	2,20,000
Less: Accumulated Depreciation	52,000	36,000
	3,23,000	1,84,000
(2) Other Current Assets:
Prepaid Expenses	-	2,000

Additional Information:

(1)

	31st March, 2024 (₹)	31st March, 2023 (₹)
Contingent Liability
Proposed Dividend	28,000	20,000

(2) Interest paid on long-term borrowings amounted to ₹ 8,000.

You are required to prepare a Cash-Flow Statement.

Answer 1

Cash Flow Statement for the year ended 31st March, 2024.
Particulars	Amount (₹)	Amount (₹)
A. Cash Flows from Operating Activities
Net Profit before Tax (W.N. 1)		1,33,000
Adjustments for non-cash and non-operating items:
Add:
Depreciation	16,000
Interest on Long-term Borrowings	8,000	24,000
Operating Profit before Working Capital Changes		1,57,000
Adjustments for Changes in Working Capital:
Less:
Increase in Inventory	(22,000)
Decrease in Trade Payables	(26,000)	(48,000)
Add:
Decrease in Trade Receivables	24,000
Decrease in Prepaid Expenses	2,000	26,000
Cash Generated from Operations		1,35,000
Less: Income Tax Paid (W.N. 2)		(10,000)
Net Cash from Operating Activities (A)		1,25,000
B. Cash Flows from Investing Activities
Purchase of Property, Plant & Equipment (W.N. 3)		(1,55,000)
Net Cash used in Investing Activities (B)		(1,55,000)
C. Cash Flows from Financing Activities
Proceeds from Long-term Borrowings		25,000
Less:
Interest Paid	(8,000)
Dividend Paid (W.N. 4)	(20,000)	(28,000)
Net Cash used in Financing Activities (C)		(3,000)
Net Decrease in Cash & Cash Equivalents (A + B + C)		(33,000)
Add: Opening Cash and Cash Equivalents		59,000
Closing Cash and Cash Equivalents		26,000

Working Note 1: Calculation of Net Profit before Tax.

Particulars	Amount (₹)
Closing Balance of Reserve & Surplus	1,25,000
Less: Opening Balance	(20,000)
Increase in Surplus (Net Profit after Tax)	1,05,000
Add: Proposed Dividend of Previous Year	20,000
Add: Provision for Current Year Tax	8,000
Net Profit before Tax	1,33,000

Working Note 2: Calculation of Income Tax Paid.

Particulars	Amount (₹)
Provision for Tax (Opening)	10,000
Provision for Tax (Closing)	15,000
Tax Provided for Current Year	8,000
Income Tax Paid during the Year	10,000

Working Note 3: Calculation of Purchase of Property, Plant & Equipment.

Particulars	Amount (₹)
Closing Balance	3,75,000
Less: Opening Balance	(2,20,000)
Cash Paid for Machinery Purchased	1,55,000

Working Note 4: Calculation of Dividend Paid

Particulars	Amount (₹)
Proposed Dividend (as on 31.3.2023) paid	20,000
Proposed Dividend (as on 31.3.2024)	Not paid
Dividend Paid during the year	20,000