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Question 44 Chapter 8 - Unimax Publication Class 12 Part 2 - 2021
44.From the following information, Calculate Net Cash Flow from Operating Activities and Financing Activities:
BALANCE SHEETS AS AT…….
| Particulars | 31.3.2022 | 31.3.2021 |
|---|---|---|
| I. Equity and liabilities | ||
| (1) Shareholders’ funds | ||
| (a)Share Capital (Note1) | 7,50,000 | 7,50,000 |
| (b)Reserves and surplus (note2) | 3,60,000 | 20,000 |
| (2) Non- Current Liabilities (18% Debentures) | 2,60,000 | 1,50,000 |
| (3) Current Liabilities | ||
| Short -term Borrowings (8% Bank Loan) | 40,000 | 50,000 |
| Trade Payables | 1,05,000 | 1,00,000 |
| Other Current Liabilities (Bank Overdraft) | 15,000 | 10,000 |
| Total | 15,30,000 | 10,80,000 |
| B. Assets | ||
| (1) Non-Current Assets | ||
| Tangible Fixed Assets (Net) | 8,60,000 | 6,20,000 |
| Intangible Assets (Goodwill) | 15,000 | 20,000 |
| Non- Current Investments | 1,25,000 | 80,000 |
| Non- Current Investments | - | 20,000 |
| (2) Current Assets | ||
| Current Investments | 5,000 | 15,000 |
| Cash & Cash Equivalents | 1,25,000 | 25,000 |
| Short -term loans & Advances (Adv. Tax.) | 5,000 | - |
| Other Current Assets | 3,95,000 | 3,00,000 |
| Total | 15,30,000 | 10,80,000 |
NOTE 1: SHARE CAPITAL
| Particulars | 31.3.2022 ₹ | 31.3.2021 ₹ |
|---|---|---|
| Equity Share Capital | 5,50,000 | 4,50,000 |
| 5% Pref. Share Capital | 2,00,000 | 3,00,000 |
| 7,50,000 | 7,50,000 |
NOTE 2: RESERVES AND SURPLUS
| Particulars | 31.3.2022 ₹ | 31.3.2021 ₹ |
|---|---|---|
| General Reserve | 1,50,000 | 1,20,000 |
| Profit and Loss A/c | 2,00,000 | (1,00,000) |
| Securities premium | 10,000 | - |
| 1,70,000 | 20,000 |
Additional Information: A piece of machinery costing 60,000 on which depreciation charged was 20,000 was sold for sold for 20,000. Depreciation provided on Fixed Assets 60,000. Preference shares were issued redeemed at a premium of 5% on 31st March ,2022. Additional Debentures were issued at par on 1st October ,2021 and bank loan was repaid on the same date. Dividend on equity shares @ 8% was paid on opening balance. Income tax 5,000 has been paid in advance during the year.
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st MARCH . 2022
| Particulars | ₹ | ₹ |
|---|---|---|
| I. cash flow from operating activities | ||
| Net profit before tax | 3,81,000 | |
| Adjustment for Non-Cash and Non-Operating Activities | ||
| Dep. on Fixed Assets | 60,000 | |
| Loss on sale of machinery | 20,000 | |
| Interest on Debentures | ||
| (1,50,000 x 8/100) +(1,10,000 x 8/100 x 6/12) | 16,400 | |
| Interest on Bank Loan | ||
| (50,000 x 8/100 x 6/12) +(40,000 x 8/100 x 6/12) | 3,600 | |
| Goodwill Amort | 5,000 | |
| Preliminary Exp. written off | 20,000 | |
| Premium on Redemption of Preference Shares | 5,000 | 1,30,000 |
| Operating Profit before Working Capital Changes | 5,11,000 | |
| Change in CA &CL | ||
| Increase in other CA | (95,000) | |
| Increase in CL | 5,000 | (90,000) |
| Net Cashflow from Op. Activities before Tax | 4,21,000 | |
| Less Tx Paid | (5,000) | |
| Net Cashflow from Op. Activities after Tax | 4,16,000 | |
| II. Cash Flow from Investing Activities: | ||
| Sale | 20,000 | |
| Purchase | (3,40,000) | (3,65,000) |
| Investment Purchase | (45,000) | |
| III. Cash Flow from Financing Activities: | ||
| Issue of Share Capital (1,00,000+10,000) | 1,10,000 | |
| Issue of Debentures | 1,10,000 | |
| Interest on Debentures | (16,400) | |
| Interest on Bank Loan | (3,600) | |
| Dividend on Equity Shares | (36,000) | |
| Dividend on Preference Shares | (15,000) | |
| Redemption of Preference Shares (1,00,000+5,000) | (1,05,000) | |
| Bank Loan Repaid | (5,000) | |
| Net Cash used from Financing Activities | (39,000) |
Working Notes: (1)
| 1.Calculation of net profit before tax | ₹ |
| Closing Balance of profit &loss A/c | 2,00,000 |
| Add: Opening Balance of P&L A/c (Dr.) | 1,00,000 |
| Add: Transfer to Reserves | 30,000 |
| Add: Dividend on Equity Shares | 36,000 |
| Add: Dividend on Pref. Shares | 15,000 |
| Net profit before tax | 3,81,000 |
Working Notes: (2)
2. FIXED ASSETS ACCCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| TO Balance b/d | 6,20,000 | By Dep A/c | 60,000 |
| To Bank A/c (Purchase) (b. f) | By Bank A/c Sales | 20,000 | |
| (Purchased B. fig) | 3,40,000 | By P& L A/c Loss | 20,000 |
| By Balance c/d | 8,60,000 | ||
| 9,60,000 | 9,60,000 |
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