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Following is the Balance Sheet of Wisben Ltd. as on 31st March 2012 During the Year a Piece of Machinery of the Book Value of Rs 80,000 Was Sold for Rs 65,000. Depreciation Provided on Tangible Assets During the Year Amounted to Rs 2,00,000. Prepare a Cash Flow Statement. - CBSE (Arts) Class 12 - Accountancy

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Question

Following is the Balance Sheet of Wisben Ltd. As on 31st March 2012

Balance Sheet of Tiger Super Steel Ltd.
Particulars Note
No.

2012

Rs

2011

Rs

I. Equity and Liabilities

   1. Shareholders' Funds

     a. Share Capital

     b. Reserves and Surplus (Profit & Loss Balance)

   2. Non-Current Liabilities

     a. Long Term-Borrowing

   3. Current Liabilities

     a. Trade Payables

 

 

 

7,00,000

2,00,000

 

3,00,000

 

30,000

 

 

6,00,000

1,10,000

 

2,00,000

 

25,000

Total   12,30,000 9,35,000

II. Assets

   1. Non- Current assets

     a. Fixed assets

        i. Tangible assets

     b. Non –Current Investment

   2. Current assets

     a. Inventory

     b. Trade Receivable

     c. Cash and Cash Equivalents

 

 

 

 

11,00,000

 

 

70,000

32,000

28,000

 

 

 

8,00,000

 

 

60,000

40,000

35,000

Total   12,30,000 9,35,000

Adjustments:

During the year a piece of machinery of the book value of Rs 80,000 was sold for Rs 65,000. Depreciation provided on tangible assets during the year amounted to Rs 2,00,000.
Prepare a Cash Flow Statement.

Solution

Cash Flow Statement
For the year ended March 31, 2013
  Particulars Rs Rs

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Operating Activities

Net Profit (As per Statement of Profit and Loss)

(2,00,000 – 1,10,000)

Items to be Added:

   Depreciation

   Loss on Sale of Machinery

Operating Profit before Working Capital Adjustments

Add: Decrease in Current Assets & Increase in Current Liabilities

      Decrease in Trade Receivables

      Increase in Trade Payables

Less: Increase in Current Assets & Decrease in Current Liabilities

      Increase in Inventory

      Cash Generated from Operations

Less: Tax Paid

Net Cash Flow from Operating Activities

 

 

 

 

2,00,000

15,000

 

 

8,000

5,000

 

(10,000)

 

 

 

 

 

90,000

 

 

2,15,000

3,05,000

 

 

 

 

3,000

3,08,000

NIL

3,08,000

B

 

 

 

Cash Flow Investing Activities

Purchase Of Machinery

Proceeds from Sale of Machinery

Net Cash used in Investing Activities

 

(5,80,000)

65,000

 

 

 

 

(5,15,000)

C

 

 

 

Cash Flow Financing Activities

Proceeds from Issue of Equity Share

Long-Term Borrowings raised

Net Cash Flow from Financing Activities

 

1,00,000

1,00,000

 

 

 

2,00,000

 

D

 

 

Net Increases Or Decreases in Cash and Cash Equivalents

Add: Cash and Cash Equivalents in the beginning of the period

Cash and Cash Equivalents at the end of the period

 

(7,000)

35,000

28,000

Working Notes:

Tangible Assets (Machinery) Account
Dr.   Cr.
Particulars Rs  Particulars  Rs

To Balance b/d 

To Bank A/c (Purchases –Bal. Fig)

 

 

8,00,000

5,80,000

 

 

By Bank A/c (Sale)

By Depreciation A/c

By Profit and Loss A/c (Loss)

By Balance c/d

65,000

2,00,000

15,000

11,00,000

  13,80,000   13,80,000
  Is there an error in this question or solution?

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Solution Following is the Balance Sheet of Wisben Ltd. as on 31st March 2012 During the Year a Piece of Machinery of the Book Value of Rs 80,000 Was Sold for Rs 65,000. Depreciation Provided on Tangible Assets During the Year Amounted to Rs 2,00,000. Prepare a Cash Flow Statement. Concept: Concept of Cash Flow Statement.
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