Question

From the following information, prepare cash flow statement:

Particulars	Note No.	31st March 2015 (Rs)	31st March 2014 (Rs)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital		7,00,000	5,00,000
b) Reserves and surplus		4,70,000	2,50,000
2. Non-current Liabilities
(8% Debentures)		4,00,000	6,00,000
3. Current Liabilities
a) Trade payables		9,00,000	6,00,000
Total		24,70,000	19,50,000
II) Assets
1. Non-current assets
a) Fixed assets
i) Tangible		7,00,000	5,00,000
ii) Intangible-Goodwill		1,70,000	2,50,000
2. Current assets
a) Inventories		6,00,000	5,00,000
b) Trade Receivables		6,00,000	4,00,000
c) Cash and cash equivalents		4,00,000	3,00,000
Total		24,70,000	19,50,000

Additional Information:

Depreciation Charge on Plant amount to Rs. 80,000.

Answer 1

Cash Flow Statement

for the year ending March 31, 2015

	Particulars	Details (Rs)	Amount (Rs)
A.	Cash from Operating Activities
	Net Profit		2,20,000
	Items to be Added:
	Interest on Debentures	48,000
	Depreciation on Fixed Assets	80,000
	Goodwill Written-off	80,000	2,08,000
	Operating Profit before Working Capital Adjustments		4,28,000
	Add: Increase in Current Liabilities
	Creditors	3,00,000
	Less: Increase in Current Assets
	Inventories	(1,00,000)
	Trade Receivables	(2,00,000)	-
	Cash Generated from Operations		4,28,000
	Less: Tax Paid		-
	Net Cash From Operating  Activities		4,28,000
B.	Cash From Investing Activities
	Purchase of Fixed Assets (WN)	(2,80,000)
	Net Cash From Investing Activities		(2,80,000)
C.	Cash From Financing Activities
	Issue of Share Capital	2,00,000
	Redemption of Debentures	(2,00,000)
	Interest Paid on Debentures	(48,000)	(48,000)
	Net Cash From Financing Activities (C)		(48,000)
	Net Increase in Cash (A + B + C)		1,00,000
	Add: Opening Cash and Cash Equivalents		3,00,000
	Closing Cash and Cash Equivalents		4,00,000

Working Note:

Fixed Assets Account

Dr.							Cr.
Particulars		J.F.	Amount (Rs)	Particulars	J.F.	Amount (Rs)
Balance b/d			5,00,000	Depreciation		80,000
Purchases (Balancing Figure)			2,80,000	Balance c/d		7,00,000
			7,80,000			7,80,000