Question

Prepare Cash Flow Statement from the following:

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019

Particulars	Note No.	(₹)
I. Revenue from Operations (Net Sales)		36,00,000
II. Expenses
Purchases of Stock-in-Trade		28,16,000
Change in Inventories of Stock-in-Trade		(65,000)
Finance Costs		15,000
Depreciation and Amortisation Expenses		80,000
Other Expenses		5,34,000
Total		33,80,000
III. Profit before Tax (I − II)		2,20,000
IV. Less: Provision for Tax		40,000
V. Profit after Tax (III − IV)		1,80,000

as at 31st March, 2019

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		6,00,000	5,00,000
(b) Reserves and Surplus	1	3,00,000	1,20,000
2. Non-Current Liabilities
Long-term Loan		1,20,000	1,50,000
3. Current Liabilities
(a) Short-term Borrowings: Bank Overdraft		13,000	...
(b) Trade Payables (Creditors)		2,85,000	2,38,000
(c) Short-term Provision:  Provision form Tax		44,000	30,000
Total		13,62,000	10,38,000
II. ASSETS
1. Non-Current Assets
Fixed Assets		6,20,000	4,00,000
2. Current Assets
(a) Short-term Investments (Marketable Security)		34,000	20,000
(b) Inventories		3,28,000	2,63,000
(c) Trade Receivables		3,48,000	3,10,000
(d) Cash and Cash Equivalents	2	32,000	45,000
Total		13,62,000	10,38,000

 

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	3,00,000	1,20,000
2. Cash and Cash Equivalents
Cash in Hand	32,000	17,000
Cash at Bank	...	28,000
	32,000	45,000

Answer 1

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (₹)	Amount (₹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	1,80,000
	Provision for Taxation	40,000
	Profit Before Taxation	2,20,000
	Items to be Added:
	Finance Cost	15,000
	Depreciation and Amortisation Expenses	80,000
	Operating Profit before Working Capital Adjustments	3,15,000
	Less: Increase in Current Assets
	Inventories	(65,000)
	Trade Receivables	(38,000)
	Add: Increase in Current Liabilities
	Trade Payables	47,000
	Cash Generated from Operations	2,59,000
	Less: Tax Paid	(26,000)
	Net Cash Flow from Operating Activities		2,33,000
B	Cash Flow from Investing Activities
	Purchase of Fixed Assets	(3,00,000)
	Net Cash Used in Investing Activities		(3,00,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital	1,00,000
	Bank Overdraft	13,000
	Redemption of Long-Term Loan	(30,000)
	Interest (Finance Cost)	(15,000)
	Net Cash Flow from Financing Activities		68,000
D	Net Increase or Decrease in Cash and Cash Equivalents		1,000
	Add: Cash and Cash Equivalent in the beginning of the period (17,000 + 28,000 + 20,000)		65,000
	Cash and Cash Equivalents at the end of the period (32,000 + 34,000)		66,000

Working Notes:

WN1

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Bank A/c (Tax Paid- Bal. Fig.)	26,000	Balance b/d	30,000
Balance c/d	44,000	Profit and Loss A/c	40,000
	70,000		70,000

WN2

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	4,00,000	Depreciation A/c	80,000
Bank A/c (Purchases- Bal. Fig.)	3,00,000	Balance c/d	6,20,000
	7,00,000		7,00,000

Note: Short-term Investments are considered as a part of Cash and Cash Equivalents