Question

Following is the Balance Sheet of R.S. Ltd. as at 31^st March, 2016 : 

R.S. Ltd. Balance Sheet as at 31-3-2016
Particulars	NoteNo.	31-03-2016 (Rs)	31-03-2015 (Rs)
I. Equity and Liabilities : (1) Shareholder's Funds
(a) Share Capital		9,00,000	7,00,000
(b) Reserves and Surplus	1	2,50,000	1,00,000
(2) Non-current Liabilities
Long-term borrowings	2	4,50,000	3,50,000
(3) Current Liabilities
(a) Short-term borrowings	3	1,50,000	75,000
(b) Short-term provisions	4	2,00,000	1,25,000
Total		19,50,000	13,50,000
II. Assets
(1) Non-current Assets
(a) Fixed Assets
(i) Tangible	5	14,65,000	9,15,000
(ii) Intangible	6	1,00,000	1,50,000
(b) Non-current Investments		1,50,000	1,00,000
(2) Current Assets
(a) Current Investments		40,000	70,000
(b) Inventories	7	1,22,000	72,000
(c) Cash and Cash Equivalents		73,000	43,000
Total		19,50,000	13,50,000

Note No.	Particulars	31-03-2016 (Rs)	31-03-2015 (Rs)
(1)	Reserves and Surplus
	(Surplus i.e. Balance in Statement of Profit and Loss)	2,50,000	1,00,000
		2,50,000	1,00,000
(2)	Long-term borrowings
	12% Debentures	4,50,000	3,50,000
		4,50,000	3,50,000
(3)	Short-term borrowings
	Bank overdraft	1,50,000	75,000
		1,50,000	75,000
(4)	Short-term provisions
	Proposed Dividend	2,00,000	1,25,000
		2,00,000	1,25,000
(5)	Tangible Assets
	Machinery	16,75,000	10,55,000
	Accumulated Depreciation	(2,10,000)	(1,40,000)
		14,65,000	9,15,000
(6)	Intangible Assets
	Goodwill	1,00,000	1,50,000
		1,00,000	1,50,000
(7)	Inventories
	Stock in trade	1,22,000	72,000
		1,22,000	72,000

Additional Information :

 

(1) Rs 1,00,000, 12% Debentures were issued on 31-3-2016.

 

(2)  During the year a piece of machinery costing Rs 80,000 on which accumulated depreciation was Rs 40,000 was sold at a loss of Rs 10,000.

 

Prepare a Cash Flow Statement.

Answer 1

Cash Flow Statement                                              for the year ended March 31, 2016
	Particulars		Amount (Rs)	Amount (Rs)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss		1,50,000
	Proposed Dividend		2,00,000	3,50,000
	Profit Before Taxation			3,50,000
	Items to be Added:
	Goodwill written off		50,000
	Debentures interest		42,000
	Depreciation		1,10,000
	Loss on sale of machinery		10,000	2,12,000
	Operating Profit before Working Capital Adjustments			5,62,000
	Less: Increase in Current Assets
		Inventories	(50,000)	(50,000)
	Cash Generated from Operations			5,12,000
	Less: Tax Paid			-
	Net Cash Flows from Operating Activities			5,12,000
B	Cash Flow from Investing Activities
		Sale of machinery	30,000
		Purchase of machinery	(7,00,000)
		Purchase of non-current investment	(50,000)	(7,20,000)
	Net Cash Used in Investing Activities			(7,20,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital		2,00,000
	Increase in Bank Overdraft		75,000
	Interest on Debentures paid		(42,000)
	Proceeds from Issue of Debentures		1,00,000
	Proposed Dividend Paid		(1,25,000)
	Net Cash Flow from Financing Activities			2,08,000
D	Net ↑/↓ in Cash and Cash Equivalents (A+B+C)			-
		Add: Cash and Cash Equivalent in the beginning of the period (43,000+70,000)		1,13,000
	Cash and Cash Equivalents at the end of the period (73,000+40,000)			1,13,000