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Question 35 Chapter 15 of Class 12 Part – 2 – 2024
Indirect Method
35. (Cash Flow from Operating Activities) From the following balance sheet of Enclotek Ltd. as on 31-3-2017 and 31-3-2018 and the additional information provided. Calculate the cash flow from operating activities.
Balance Sheet of AB LTD.
| Particulars | Figures as at the end of the current reporting period | Figures as at the end of the previous reporting period |
| I. Equity and Liabilities | ||
| Shareholders Fund : | ||
| Equity Share Capital | 4,50,000 | 4,50,000 |
| 5% Preference share capital | 2,00,000 | 3,00,000 |
| Reserves and surplus | ||
| Statement of Profit and Loss | 2,00,000 | (1,00,000) |
| General Reserve | 1,50,000 | 1,20,000 |
| Preliminary Expenses | -5,000 | -25,000 |
| Non-Current Liabilities | ||
| Long-term borrowings : | ||
| 8% Debentures | 3,00,000 | 2,00,000 |
| Current Liabilities | ||
| Trade Payables | 1,10,000 | 1,08,000 |
| Output IGST | 10,000 | 2,000 |
| Total | 14,15,000 | 10,55,000 |
| II. Assets | ||
| Non –Current Assets | ||
| Tangible Assets | ||
| Fixed Assets (Net) | 8,60,000 | 6,20,000 |
| Investments | 1,25,000 | 80,000 |
| Intangible Assets : | ||
| Goodwill | 10,000 | 15,000 |
| Current Assets | ||
| Inventories | 4,20,000 | 3,40,000 |
| Total | 14,15,000 | 10,55,000 |
Cash Flow from Operating Activities
| Particulars |
Rs |
|
|---|---|---|
| Net Profit as per Statement of Profit & Loss | 3,00,000 | |
| Add: Goodwill Written off | 5,000 | |
| Transfer to General Reserve | 30,000 | |
| Preliminary expenses are written off | 20,000 | |
| Depreciation on fixed assets | 60,000 | |
| Premium on redemption of shares | 5,000 | |
| Interest on debentures* | 18,000 | |
| Preference Dividend paid | 15,000 | |
| Proposed equity dividend | 36,000 | 1,89,000 |
| Cash operating profit before the change in working capital | 4,89,000 | |
| Add: Increase in Current Liabilities | ||
| Sundry Creditors | 2,000 | |
| Output IGST | 8,000 | 10,000 |
| 4,99,000 | ||
| Less: Increase in Current Assets | ||
| Inventories | 80,000 | |
| Cash Flow from Operating activities | 4,19,000 | |
Working Note
1. Interest on Debenture 80,000
| Amount | Rate of interest | Month | Interest Value |
| ₹ 2,00,000 | 8% | 12 Months | ₹ 16,000 |
| ₹ 1,00,000 | 8% | 3 Months | ₹ 2,000 |
| ₹ 8,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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