Question

Following is the Balance Sheet of Mevanca Limited as at 31^st March, 2017:

Particulars			Note No.	31st March, 2017 (₹)	31st March, 2016 (₹)
I.	EQUITY AND LIABILITIES
	1.	Shareholder’s Funds
		(a) Share Capital		3,00,000	1,00,000
		(b) Reserves and Surplus	1	25,000	1,20,000
	2.	Non-Current Liabilities
		Long-term Borrowings	2	80,000	60,000
	3.	Current Liabilities
		(a) Trade Payables		6,000	20,000
		(b) Short-term Provisions	3	68,000	70,000
		Total		4,79,000	3,70,000
II.	ASSETS
	1.	Non-Current Assets
		Fixed Assets	4	3,36,000	1,92,000
	2.	Current Assets
		(a) Inventories		67,000	60,000
		(b) Trade Receivables		51,000	65,000
		(c) Cash and Cash Equivalents		25,000	49,000
		(d) Other Current Assets		-	4,000
		Total		4,79,000	3,70,000

 Notes to Accounts:

Particulars		31st March, 2017 (₹)	31st March, 2016 (₹)
1.	Reserves and Surplus
	Surplus, i.e., balance in Statement of Profit and Loss	25,000	1,20,000
		25,000	1,20,000
2.	Long-term Borrowings
	10% Long-term Loan	80,000	60,000
		80,000	60,000
3.	Short-term Provisions
	Provision for Tax	68,000	70,000
		68,000	70,000
4.	Fixed Assets
	Machinery	3,84,000	2,15,000
	Accumulated Depreciation	(48,000)	(23,000)
		3,36,000	1,92,000

Additional Information:

1. Additional loan was taken on 1^st July, 2016.
2. Tax of ₹53,000 was paid during the year.

Prepare Cash Flow Statement.

Answer 1

MEVANCA LTD.
CASH FLOW STATEMENT FOR THE YEAR ENDING 31st MARCH, 2017
Particulars		Amount (₹)	Amount (₹)
I.	Cash Flow from Operating Activities
	Net Loss before Tax and Extraordinary Items (WN1)		(44,000)
	Adjustment for Non-Cash and Non-operating items
	Add: Depreciation on Machinery	25,000
	Interest on 10% Long term Loan	7,500	32,500
	Operating Loss before Working Capital Changes		(11,500)
	Add: Decrease in Current Assets and Increase in Current Liabilities
	Decrease in Trade Receivables	14,000
	Decrease in Other Current Assets	4,000	18,000
	Less: Increase in Current Assets and Decrease in Current Liabilities
	Decrease in Trade Payables	(14,000)
	Increase in Inventories	(7,000)	(21,000)
	Cash Generated from Operations		(14,500)
	Less: Income Tax Paid		(53,000)
	Cash Used In Operating Activities		(67,500)
II.	Cash Flow from Investing Activities
	Payment for Purchase of Machinery	(1,69,000)
	Cash Used in Investing Activities		(1,69,000)
III.	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Shares	2,00,000
	Proceeds from Long-term loan	20,000
	Payment of Interest on Loan	(7,500)
	Cash Flow from Financing Activities		2,12,500
IV.	Net Decrease in Cash and Cash Equivalent (I + II + III)		(24,000)
V.	Add: Cash and Cash Equivalents at the beginning of the year		49,000
VI.	Cash and Cash Equivalents at the end of the year		25,000

Working Note 1:

Particulars		Amount (₹)
1.	Calculation of Net profit before Tax and Extra-ordinary Items
	Net Profit as per Statement of Profit and Loss	(95,000)
	(44,000) Provision for tax	51,000
	Net Profit before Tax and Extraordinary items	(44,000)

Working Note 2:

Dr.	PROVISION FOR TAX ACCOUNT		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Bank A/c (Tax paid)	53,000	By Balance b/d	70,000
To Balance c/d	68,000	By Statement of Profit & Loss A/c (Balancing Figure)	51,000
Total	1,21,000	Total	1,21,000