Question

From the following Balance Sheets of Ronald Ltd., you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2023-24.

Balance Sheets of Ronald Ltd. As at 31st March, 2024 and 31st March, 2023
Particulars	Note No.	31.03.2024 (₹)	31.03.2023 (₹)
I. EQUITY AND LIABILITIES
1. Shareholder's Funds
(a) Share Capital		6,00,000	6,00,000
(b) Reserves and Surplus (Statement of P & L)		80,000	(60,000)
2. Non-Current Liabilities
Long Term Borrowings		1,00,000	1,50,000
3. Current Liabilities
(a) Short-term borrowings (Bank overdraft)		1,75,000	22,000
(b) Short Term Provisions (Provision for Tax)		15,000	28,000
Total		9,70,000	7,40,000
II. ASSETS
1. Non-Current Assets
(a) Property, Plant & Equipment & Intangible Assets
(i) Property, Plant & Equipment (Plant & Machinery)		5,50,000	6,40,000
(b) Non- Current Investments (7% Debentures of Violet Ltd.)		1,40,000	50,000
2. Current Assets
Cash & Bank Balance (Bank)		2,80,000	50,000
Total		9,70,000	7,40,000

Additional information:

1. The Debentures of Violet Ltd. were purchased on 31st March, 2024.
2. During the year 2023-24:
   1. Tax of ₹ 20,000 was paid.
   2. Interest on all borrowings due and paid was ₹ 25,000.

Answer 1

Cash Flow Statement of Ronald Ltd. For the year ending 31st March, 2024
Particulars	(₹)	(₹)
I. Cash from Operating Activities
Net profit before tax (working note 2)	1,47,000
Add non operating/non cash expenses
Depreciation on Plant & Machinery	90,000
Interest on Borrowings	25,000
Less: Interest on Investment received	(3,500)
Net operating profit before working capital changes/Cash from Operating Activities before Tax paid	2,58,500
Less: Tax paid	(20,000)
Cash Flow from Operating Activities		2,38,500
II. Cash from Investing Activities
Purchase of Investments	(90,000)
Interest on Investments received	3,500
Cash used in Investing Activities		(86,500)
III. Cash from Financing Activities
Repayment of long-term borrowings	(50,000)
Interest on borrowings paid	(25,000)
Bank overdraft taken	1,53,000
Cash Flow from Financing Activities		78,000
Net increase in Cash as per I, II and III		2,30,000
Add Operating Cash and Cash Equivalents
Bank		50,000
Closing Cash and Cash Equivalents
Bank	2,80,000
	2,80,000	2,80,000

Working Note: 1

Provision for Tax A/c
Particulars	Amount (₹)	Particulars	Amount (₹)
To Bank A/c	20,000	By Balance b/d	28,000
To Balance c/d	15,000	By Statement of P/L	7,000
	35,000		35,000

Working Note: 2

	Amount (₹)
Statement of P/L	1,40,000
Provision for Tax	7,000
Net Profit before Tax	1,47,000