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Prepare Cash Flow Statement. - Accountancy

Numerical

Following are the Balance Sheets of Solar Power Ltd. as at 31st March, 2014 and 2013:

Solar Power Ltd.
BALANCE SHEET

Particulars

Note No.

31st March, 2014

(₹)

31st March, 2013

(₹)

I. EQUITY AND LIABILITIES      

1. Shareholders' Funds

     

(a) Share Capital

 

24,00,000 22,00,000

(b) Reserves and Surplus

1 6,00,000 4,00,000

2. Non-Current Liabilities

     

Long-term Borrowings

  4,80,000 3,40,000
3. Current Liabilities      

(a) Trade Payables

  3,58,000 4,08,000

(b) Short-term Provisions

 

1,00,000 1,54,000

Total

  39,38,000 35,02,000
II. ASSETS      

1. Non-Current Assets

     

Fixed Assets:

     

(i) Tangible Assets

2 21,40,000 17,00,000

(ii) Intangible Assets

3 80,000 2,24,000

2. Current Assets

     

(a) Current Investments

  4,80,000 3,00,000

(b) Inventories

  2,58,000 2,42,000

(c) Trade Receivables

  3,40,000 2,86,000

(d) Cash and Cash Equivalents

  6,40,000 7,50,000

Total

  39,38,000 35,02,000

 Notes to Accounts

Particulars

31st March, 2014

(₹)

31st March, 2013

(₹)

1. Revenue and Surplus

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

6,00,000 4,00,000
2. Tangible Assets    

Machinery

25,40,000 20,00,000

Less: Accumulated Deprciation

(4,00,000) (3,00,000)
  21,40,000 17,00,000
3Intangible Assets    

Goodwill

80,000 2,24,000

Additional Iformation:
Druing the year, a piece of machinery costing ₹ 48,000 on which accumulated deprciation was ₹ 32,000. was sold for ₹ 12,000. Prepare Cash Flow Statement.

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Solution

 

Cash Flow Statement 

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

2,00,000

 

 

Profit Before Taxation

 

2,00,000

 

Items to be Added:

 

 

 

Amortisation of Goodwill

1,44,000

 

 

Depreciation

1,32,000

 

 

Loss on Sale of Fixed Assets

4,000

2,80,000

 

Operating Profit before Working Capital Adjustments

 

4,80,000

 

Less: Increase in Current Assets

 

 

 

 

Inventories      

16,000

 

 

 

Trade Receivables

54,000

 

 

Less: Decrease in Current Liabilities

 

 

 

     Trade Payables

50,000

 

 

Short-Term Provisions

54,000

1,74,000

 

Net Cash Generated from Operating Activities

 

3,06,000

 

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

 

Sale of Machinery

12,000

 

    Purchase of Machinery (5,88,000)  

 

Net Cash Used in Investing Activities

 

(5,76,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

2,00,000

 

 

Proceeds from Long Term Borrowings

1,40,000

 

 

Net Cash Flow from Financing Activities

 

3,40,000

 

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

70,000

 

 

Add: Cash and Cash Equivalent in the beginning of the 

period

 

10,50,000

 

Cash and Cash Equivalents at the end of the period

 

11,20,000

Working Notes:

Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

20,00,000

Bank A/c (Sale)

12,000

Bank A/c (Purchase- Bal. Fig.)

5,88,000

Depreciation on Part of Machinery

32,000

 

 

Profit and Loss A/c (Loss on Sale)

4,000

 

 

Balance c/d

25,40,000

 

25,88,000

 

25,88,000

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Machinery A/c

32,000

Balance b/d

3,00,000

Balance c/d

4,00,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

1,32,000

 

4,32,000

 

4,32,000

Concept: Preparation of Cash Flow Statement
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APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 4 Cash Flow Statement
Exercise | Q 43 | Page 106
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