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You Are Required to Prepare Cash Flow Statement. - Accountancy

Numerical

The Balance Sheet of Virendra Paper Ltd. as at 31st March, 2019 is given below:

Particulars

Note No.

31st March, 2019

(₹)

31st March, 2018

(₹)

I. EQUITY AND LIABILITIES      

1. Shareholders' Funds

     

  (a) Share Capital

  7,20,000 6,00,000

  (b) Reserves and Surplus:

     

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

  4,80,000 3,75,000

2. Non-Current Liabilities

     

Long-term Borrowings:

     

   10% Debentures

  2,70,000 4,50,000

3. Current Liabilities

     

  Trade Payables

  1,20,000 90,000

Total

  15,90,000 15,15,000
II. ASSETS      

1. Non-Current Assets

     

  Fixed Assets (Tangible)

1 7,50,000 7,20,000

2. Current Assets

     

(a) Inventories

  3,60,000 4,20,000

(b) Trade Receivables

  3,00,000 2,25,000

(c) Cash and Cash Equivalents

  1,80,000 1,50,000

Total

  15,90,000 15,15,000

Notes to Accounts

Particulars

31st March, 2019

(₹)

31st March, 2018

(₹)

1. Fixed Assets (Tangible)

 

 

   

Land

 

 

2,40,000

3,00,000

 

31st March,

31st March,

   
 

2019 (₹)

2018 (₹)

   

Plant and Machinery

7,50,000

6,00,000

   

Less:Accumulated Depreciation

2,40,000

1,80,000

   
 

5,10,000

4,20,000

5,10,000

4,20,000

 

 

 

7,50,000

7,20,000

Additional Information:
1. Interim Dividend of ₹75,000 has been paid during the year.
2. Debenture Interest paid during the year ₹ 27,000.
You are required to prepare Cash Flow Statement.

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Solution

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 (4,80,000 – 3,75,000)

1,05,000

 

 

Interim Dividend

75,000

 

 

Profit Before Taxation

1,80,000

 

 

Items to be Added:

 

 

 

Interest Paid on Debentures

27,000

 

 

Depreciation

60,000

 

 

Operating Profit before Working Capital Adjustments

2,67,000

 

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(75,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

30,000

 

 

Add: Decrease in Current Assets

 

 

 

Inventories

60,000

 

 

Cash Generated from operations

2,82,000

 

 

Less: Tax Paid

 

 

Net Cash Flow from Operating Activities

 

2,82,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Land

60,000

 

 

Purchase of Machinery

(1,50,000)

 

 

Net Cash Used in Investing Activities

 

(90,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

1,20,000

 

 

Redemption of 10% Debentures

(1,80,000)

 

 

Interim Dividend Paid

(75,000)

 

 

Interest Paid on Debentures

(27,000)

 

 

Net Cash Used in Financing Activities

 

(1,62,000)

 

 

 

 

D

Net Increase in Cash and Cash Equivalents

 

30,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

1,50,000

 

Cash and Cash Equivalents at the end of the period

 

1,80,000

Concept: Preparation of Cash Flow Statement
  Is there an error in this question or solution?
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APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 4 Cash Flow Statement
Exercise | Q 47 | Page 110
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