Question

Prepare a Cash Flow Statement from the following Balance Sheets of Arya Ltd.:

	Particulars	Note	31.3.2023 (₹)	31.3.2022 (₹)
I.	Equity and Liabilities:
(1)	Shareholders’ Funds:
a)	Share Capital	1	10,00,000	8,00,000
b)	Reserves and Surplus	2	6,40,000	5,40,000
(2)	Non-Current Liabilities:
	Long-term Borrowings		1,50,000	1,00,000
(3)	Current Liabilities:
a)	Trade Payables	3	30,000	12,000
b)	Short-term Provisions		30,000	28,000
	Total		18,50,000	14,80,000
II.	Assets:
(1)	Non-Current Assets:
a)	Property, Plant and equipment and intangible assets: Property, Plant and Equipment	4	7,75,000	4,90,000
b)	Non-current Investments		90,000	50,000
(2)	Current Assets
a)	Inventory		6,20,000	4,13,000
b)	Trade receivables		3,20,000	4,94,000
c)	Cash & Cash Equivalents		45,000	33,000
	Total		18,50,000	14,80,000

Notes to Accounts:

	Particulars	31.3.2023	31.3.2022
1.	Reserves & Surplus:
	General Reserve	5,00,000	4,30,000
	Capital Reserve	60,000	50,000
	Surplus ie balance in statement of profit and loss	80,000	60,000
		6,40,000	5,40,000
2.	Long-term Borrowings:
	10% Debentures	1,50,000	1,00,000
3.	Short-term Provisions:
	Provision for tax	30,000	28,000
4.	Tangible Assets:
	Plant and Machinery	7,75,000	4,90,000

Additional Information:

1. Tax provided during the year is ₹ 17,000.
2. Depreciation charged on plant and Machinery during the year amounted to ₹ 1,20,000.
3. Non-current Investments costing ₹ 30,000 were sold for ₹ 40,000 during the year. Gain on sale of Investments was credited to Capital Reserve.
4. Additional Debentures were issued on 31.03.2023.

Answer 1

Cash Flow Statement for the year ended March 31, 2023
Particulars	Details	Amount (₹)
Cash from Operating Activities
Profits before Tax and Extraordinary Activities	1,07,000
Add:- Non-Cash and Non-Operating Expenses
Depreciation on Plant and Machinery	1,20,000
Interest on Debentures	10,000
Cash from Operating Activities before working capital changes	2,37,000
Increase in Trade Payables	18,000
Decrease in Trade Receivable	1,74,000
Increase in Inventory	(2,07,000)
Cash from Operations	2,22,000
Less:- Tax Paid	(15,000)
Cash from Operating Activities (A)		2,07,000
Cash from Investing Activities
Sale of Investments	40,000
Purchase of Investments	(70,000)
Purchase of Plant and Machinery	(4,05,000)
Cash from Investing Activities (B)		(4,35,000)
Cash from Financing Activities
Issue of Shares	2,00,000
Issue of Debentures	50,000
Interest on Debentures	(10,000)
Cash from Financing Activities (C)		2,40,000
Net Cash Flow during the year (A+B+C)		12,000
Add:- Opening Cash and Cash Equivalents		33,000
Closing Cash and Cash Equivalents		45,000

Working Notes:-

Plant and Machinery Account
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	4,90,000	Depreciation A/c	1,20,000
Bank (Purchase)	4,05,000	Balance c/d	7,75,000
	8,95,000		8,95,000

 

Investments Account
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	50,000	Bank A/c (sale)	40,000
Gain on Sale (Capital Reserve)	10,000	Balance c/d	90,000
Bank (Purchase)	70,000
	1,30,000		1,30,000

 

Provision for Tax Account
Particulars	Amount (₹)	Particulars	Amount (₹)
Bank (Paid)	15,000	Balance b/d	28,000
Balance c/d	30,000	Statement of Profit and Loss	17,000
	45,000		45,000

Net Profits after Tax and Extraordinary Items = 20,000

+ Transfer to General Reserve = 70,000

+ Provision for Tax = 17,000

= Net Profits before Tax and Extraordinary Items = 1,07,000