From the Following Balance Sheet of Jy Ltd. as at 31st March 2017, Prepare a Cash Flow Statement : - Accountancy

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From the following Balance Sheet of JY Ltd. as at 31st March 2017, prepare a Cash Flow Statement :

Balance Sheet of JY Ltd.
as at 31.3.2017
Particular Note No.

31-3-2017

Rs

31-3-2016

Rs

I. Equity and Liabilities

  1. Shareholders' Funds:

     (a) Share capital

     (b) Reserves and surplus

  2. Non-current Liabilities:

    Long term-borrowing

  3. Current Liabilities:

    (a) Short-term borrowings

    (b) Short-term provisions

 

 

 

1

 

2

 

3

4

 

 

5,00,000

1,00,000

 

2,50,000

 

1,50,000

2,00,000

 

 

5,00,000

(25,000)

 

1,50,000

 

1,00,000

1,25,000

Total   12,00,000 8,50,000

II. Assets

   1. Non- Current Assets:

     (a) Fixed Assets:

         (i) Tangible

   2. Current Assets:

    (a) Trade Receivable

    (b) Cash and Cash Equivalents

    (c) Short-term Loans and Advances

 

 

 

5

 

 

 

 

 

 

 

6,00,000

 

2,75,000

1,25,000

2,00,000

 

 

 

4,50,000

 

2,25,000

75,000

1,00,000

Total   12,00,000 8,50,000

 

Notes to Accounts

Note No Particulars

31-3-2017

Rs

31-3-2016

Rs

1

 

 

2

 

 

3

 

 

 

4

 

 

 

5

 

 

Reserve and Surplus

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

 

 

1,00,000

 

(25,000)

1,00,000 (25,000)

Long-term borrowings :

10 % Debentures

 

 

2,50,000

 

1,50,000

2,50,000 1,50,000

Short-term borrowings :

Bank Overdraft

 

 

1,50,000

 

1,00,000

1,50,000 1,00,000

Short-term provisions:

(i) Proposed Dividend

(ii) Provision for Tax

 

 

75,000

1,25,000

 

50,000

75,000

2,00,000 1,25,000

Tangible Assets:

Machinery

Accumulated Depreciation

 

 

7,37,500

(1,37,500)

 

5,25,000

(75,000)

6,00,000 4,50,000

Additional Information:

Rs 1,00,000, 10% Debentures were issued on 31-3-2017.

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Solution

  Particulars Rs Rs

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B

 

 

C

 

 

 

 

 

D

 

 

Cash Flow from Operating Activities

Profit as per statement of Profit and Loss on 31st March 2017

Less: Profit as per statement of Profit and Loss on 31st March 2016 (Loss)

 

Add: Proposed Dividend

     Provision for Tax

Net Profit Before Taxation and Extra-ordinary items

Items to be Added:

Depreciation Expenses (1,37,500 – 75,000)

Interest on Debentures (1,50,000 x 10%)

Operating Profit Before Working Capital Changes

Less: Decreases in Current Liabilities and Increases in Current Assets

    Increases in Trade Receivables (2,75,000 – 2,25,000)

    Increases in Short-term Loans & Advance (2,00,000 – 1,00,000)

Cash Generated from Operations

Less: Tax Paid during the year

Net Cash Flows from Operating Activities

Cash Flow from Investing Activities

Purchase of Machinery (7,37,500 – 5,25,000)

Cash Used in Investing Activities

Cash Flow from Financing Activities

Proceeds from Issue of 10% Debentures (2,50,000 – 1,50,000)

Increase in Bank Overdraft (1,50,000 – 1,00,000)

Dividend Paid i.e. Opening Proposed Dividend

Interest on Debentures (1,50,000 x 10%)

     Net Cash Flow from Financing Activities

Net Increase or Decrease in Cash and Cash Equivalents (A+B +C)

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

Cash and Cash Equivalents at the end of the period

1,00,000

(25,000)

1,25,000

75,000

1,25,000

 

 

 62,500

 15,000

 

 

 50,000

 1,00,000

 

 

 

 

 (2,12,500)

 

 

 1,00,000

 50,000

 (50,000)

 (15,000)

 

 

 

 

 

 

 

 

3,25,000

 

 

 

 77,500

 4,02,500

 

 

 1,50,000

 2,52,500

 75,000

 1,77,500

 

 2,12,500

 (2,12,500)

 

 

 

 

 

 85,000

 50,000

 75,000

 1,25,000

 

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

                                                     S.N Ltd Balance Sheet as at 31-3-2015

Particulars Note No. 31-03-2015 (Rs.) 31-03-2014 (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

 

 

2,50,000

1,00,000

 

2,25,000

 

75,000

35,000 

 

 

2,00,000

(25,000)

 

2,50,000

 

25,000

45,000 

Total   6,85,000   4,95,000

 II. Assets

       1. Non – Current Assets

                a) Fixed Assets

                      Tangible assets

                      Intangible

                 b) Non – Current Investments

         2. Current Assets

                 a) Current Investments

                  b) Inventories

                  c) Cash and Cash Equivalents

 

 

 

5

6

 

 

 

7

 

 

 

 

5,01,500

10,000

50,000

 

25,000

53,500

45,000 

 

 

 

3,60,000

15,000

37,500

 

30,000

22,500

30,000 

 Total    6,85,000 4,95,000 

 

Note No. Particulars 31-3-2015 (Rs.) 31-3-2014 (Rs.)

1.

 

Reserve and Surplus

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

 

1,00,000

 

(25,000)

    1,00,000 (25,000)

2.

 

Long term borrowings :

12 % Debentures

 

2,25,000

 

2,50,000

    2,25,000 2,50,000

3.

 

Short – term borrowings :

Bank Overdraft

 

75,000

 

25,000

    75,000 25,000

4.

 

Short – term provisions

Provisions for tax

 

35,000

 

45,000

    35,000 45,000

5.

 

 

Tangible Assets

Machinery

Accumulated Depreciation

 

6,01,500

(1,00,000)

 

4,10,500

(50,500)

    5,01,500 3,60,000

6.

 

Intangible Assets

Goodwill

 

10,000

 

15,000

    10,000 15,000

7.

 

Inventories

Stock in trade

 

53,500

 

22,500

    53,500 22,500

Additional Information

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

(ii) Tax Rs.35,000 was paid during the year

Prepare Cash flow Statement


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

Balance Sheet of Tiger Super Steel Ltd
Particulars Note 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   5,67,000 3,81,000

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   5,67,000 3,81,000

 

Notes to Account:

Note -1

Particulars 2013 (Rs.) 2012 (Rs.)

Reserve and Surplus

Surplus (balance in statement of profit and loss)

 

1,32,000

 

24,000


Why is separate disclosure of cash flows from investing activities important? State.


State the primary objective of preparing a Cash Flow Statement.


State whether the following will increase, decrease or have no effect on cash flow from operating activities while preparing 'Cash Flow Statement':

1) A decrease in outstanding employees benefits expenses by Rs 3,000

2) Increase in prepaid insurance by Rs 2,000


Which of the following transactions will result in 'Flow of Cash’?
(a) Deposited Rs 10,000 into the bank.
(b) Withdrew cash from bank Rs 14,500.
(c) Sale of the machinery of the book value of Rs 74,000 at a loss of Rs 9,000.
(d) Converted Rs  2,00,000 9% debentures into equity shares.


Which of the following transactions will result in 'Flow of Cash’?

(a) An issue of equity shares of Rs 1, 00,000.
(b) Purchase of machinery of  Rs 1,75,000.
(c) Redemption of 9% debentures Rs  3,50,000.
(d) Cash deposited into bank Rs 15,000.


Which of the following transactions will result in the flow of cash?
(1) Cash was withdrawn from bank Rs 20,000.
(2) Issued Rs 20,000; 9% debentures for the vendors of machinery.
(3) Received Rs 19,000 from debtors.
(4) Deposited cheques of Rs 10,000 into the bank


Which of the following transactions will result in the flow of cash?
(1) Deposited Rs 40,000 into the bank.
(2) Withdrew cash from bank Rs 54,000.
(3) Sold marketable securities of Rs 25,000 at par.
(4) The sold machinery of the book value of Rs 50,000 at a gain of  Rs 10,000


The accountant of 'Nav Jeevan Limited' while preparing Cash Flow Statement added the proposed
dividend of the current year to net profit while calculating cash flow from operating activities. Was he correct in doing so? Give reason.


While preparing 'Cash Flow Statement', the accountant of 'Jain Limited', a financing company, showed dividend received on investments as investing activity. Was he correct in doing so? Give reason.


What is meant by 'Cash from Operating Activities'?


State any two advantages of preparing cash flow statement.


State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment': 

(i) Purchase of machinery worth Rs 2,00,000 by issue of equity shares.
(ii) Charging depreciation of Rs 5,000 on machinery.
(iii) Redemption of debentures in cash Rs 70,000.
(iv) Converting Rs 50,000, 9% debentures into equity shares.


State any two benefits of preparing 'Cash Flow Statement'. 


From the following Balance Sheets of Sonam Ltd as on 31-3-2012 and 31-3-2011.

Prepare a Cash Flow Statements:  

Liabilities

31-3-2011

Rs

31-3-2011

Rs

Assets

31-3-2011

Rs

31-3-2011

Rs

Equity Shares Capital

Profit and Loss Account

Bank Loan

Proposed Dividend

Provision for tax

Creditors

1,00,000

 

25,000

 

50,000

20,000

 

10,000

15,000

 

1,50,000

 

50,000

 

25,000

15,000

 

17,500

11,250

Patents

Building

Investment

Debtors

Stock

Cash

 

 

 

 

12,500

1,50,000

-

50,000

2,500

5,000

11,250

1,50,000

18,750
63,750

3,750

21,250

 

 

2,20,000

2,68,750

 

2,20,000

2,68,750

 

 

 

 

 

Additional Information:

During the year a Building having book value Rs 50,000 was sold at a loss of Rs 2,000 and deprecation charged on Building was Rs 4,000


                    You are required to prepare a Cash-Flow Statement (as per AS-3)
                          for the year 2016-17 from the following Balance Sheet.
                                    Balance Sheet of Honesty Ltd.
                          As at 31st March, 2016 and 31st March, 2017

  I     Particulars     Note No.          31.03.2017

31.03.2017

1.

EQUITY AND LIABILITIES
Shareholders Funds
(a) Share Capital (Equity Share Capital)
(b) Reserves and Surplus (Statement of P/L)

1.

           

                    14,00,000 

 5,00,000

 

 

 

 

 

10,00,000

4,00,000

 

 

 

2. Non-Current Liabilities
Long Term Borrowing (10% Debentures)
  5,00,000 1,40,000
3. Current Liabilities
(a) Short Term Borrowings (Bank Overdraft)  
(b) Trade Payables (Creditors)
(c) Short Term Provisions
 

20,000

1,00,000

60,000

30,000

60,000

30,000

  TOTAL   25,80,000 16,60,000
II 1.  ASSETS
Non-Current Assets
Fixed Assets 
(i) Tangible 
(ii) Intangible (Goodwill)
      2.

 

 

16,00,000

1,40,000

 

 

9,00,000

2,00,000

  2. Current Assets
(a) Inventories
(b) Trade Receivables 
(c) Cash and Bank Balances
(Cash at Bank)
 

2,50,000

5,00,000

90,000

2,00,000

3,00,000

60,000

  TOTAL   25,80,000 16,60,000

Notes to Accounts:

Particulars 31.03.2017 31.03.2016
1. Short term provisions
provision for taxation
60,000 30,000
2. Fixed Assets (Tangible)
Plant and Machinery 
Less Accumulated Depreciation

 

17,60,000

(1,60,000)

 

10,00,000

(1,00,000)

  16,00,000 9,00,000

During the year 2016-17:
(i) A part of the machine, costing Rs. 50,000, accumulated depreciation thereon being Rs. 20,000, was sold for
Rs.18,000.
(ii) Tax paid Rs. 20,000.
(iii) Interest of Rs. 50,000 paid on Debentures.


Long Answer Question

Describe"Indirect" method of ascertaining Cash Flow from Operating Activities.


Following are the extracts from the Balance Sheet of MAH Ltd. as at 31st March, 2019

Particular

31st March

2019

(₹)

31st March

2018

(₹)

Surplus, i.e., Balance in Statement of Profit and Loss

10,00,000

5,00,000

Dividend Payable

50,000

Additional Information: Proposed Dividend for the years ended 31st March, 2018 and 2019 are ₹ 4,00,000 and ₹ 5,00,000 respectively.
Prepare the Note to show Net Profit before Tax and Extraordinary Items.


"______ implies movement of cash in and out of non-cash items. Receipt of cash from a non-cash item is termed as cash inflow while cash payment in respect of such items as cash outflow"


Which one is Cash Inflows from operating activities?


Which one is Cash Outflows from operating activities?


Which one is Cash Inflows from Financing activities?


What is the primary objective of cash flow statement?


From the following information, calculate cash flows from financing activities:

Long-term Loans Rs. 2,09,000 Rs. 2,50,000

During the year, the company repaid a loan of Rs. 1,00,000.


Balance Sheet (Extract)

Liabilities 30-03-2018 (₹) 31-03-2017 (₹)
Fixed Assets 23,80,000 17,50,000

Depreciation on fixed assets was ₹ 2,00,000 for the year. How much amount for 'Purchase of fixed assets' will be shown in investing activity for cash flow statement prepared on 31st March, 2018?


Cash flow example from an Investing activity is:


Which of the following is not an investing cash flow?


From the following information, find out Cash Outflow from Financing Activities.

  Year I Year II
Proposed Dividend ₹ 1,20,000 ₹ 1,50,000
12% debentures ₹ 4,00,000 ₹ 5,00,000

Additional Information:

Additional Debentures were issued at the end of the year.

Interim Dividend paid ₹ 50,000

Preference Share Capital Issued ₹ 2,00,000


State whether the following transaction will result in inflow, outflow or no flow of cash while preparing cash flow statement:

Interest received in cash from loans and advances ₹ 80,000.


From the following information of Hoopla Ltd., you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2021 - 22.

  Particulars (₹)
(i) Profit for the year 2021-22, before considering dividend
and tax but after taking into account the following items:
15,80,000
  (a) Depreciation on Property, Plant & Equipment 5,50,000
  (b) Interest Payable on Bank Loan 3,80,000
  (c) Profit on sale of investments, the book value of
which was ₹ 2,20 000.
1,00,000
(ii) During the year 2021-22:  
  (a) The company  
  • Paid Tax (which was provided in 2020 - 21) 4,40,000
  • Issued 66,000 equity shares of ₹ 10 each 6,60,000
  • Repaid Bank Loan 15,00,000
  • Paid interest on Bank Loan 3,00,000
  • Paid Dividend 5,00,000
  (b) Trade payables decreased by 10,000
  (c) Cash at bank increased from ₹ 60,000 on 1st April,
2021 to ₹ 7,00,000 on 31st March, 2022.
 

From the following Balance Sheets of Rainbow Ltd., you are required to prepare a Cash Flow Statement (as per As 3) for the year 2021 - 22.

Balance Sheets of Rainbow Ltd.
As at 31st March, 2022 and 31st March, 2021
Particulars Note no. 31.3.2022
(₹)
31.3.2021
(₹)
I. Equity and liabilities      
1. Shareholder's Funds      
(a) Share Capital (Equity)   4,00,000 4,00,000
(b) Reserve and Surplus 1 1,60,000 1,20,000
2. Non-Current Liabilities      
Long-term Borrowings (5% Debentures)   3,50,000 2,60,000
3. Current Liabilities      
Short term Provision (Provision for Tax)   30,000 25,000
Total   9,40,000 8,05,000
II. Assets      
1. Non-Current Assets      
Property, Plant & Equipment & Intangible Assets      
(i) Property, Plant & Equipment (Plant & Machinery)   6,00,000 7,80,000
2. Current Assets      
Cash & Bank Balances (Cash at Bank)   3,40,000 25,000
Total   9,40,000 8,05,000

Notes to Accounts:

Particulars 31.3.2022 (₹) 31.3.2021 (₹)
I. Reserves and Surplus    
General Reserve 30,000 20,000
Balance in Statement of Profit and Loss 1,30,000 1,00,000

Additional Information:

During the year 2021-22, the company:

  1. Sold a machine for ₹ 90,000 at a loss ₹10,000.
  2. Issued the 5% Debentures on 31st March; 2022, at a discount of 10%. The discount was written off from General Reserve.

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