Question 46 Chapter 5 of +2-B - USHA Publication 12 Class

Question 46 Chapter 5 of +2-B

PREPARING OF CASH FLOW STATEMENT (WITHOUT ADJUSTMENT)

46. (CFS from Operating, Investing & Financing Activities) From the following particulars of Vandana Ltd. Prepare cash flow statement.

Particulars			Note No.	31st March,2018	31st March, 2017
I. Equity and Liabilities
Shareholders Fund :
Share Capital				1,50,000	1,00,000
10% Preference share capital				25,000	50,000
Reserves and surplus
Balance in Statement of Profit and Loss				1,00,000	50,000
Current Liabilities
Trade Payable				1,00,000	75,000
Total				3,75,000	2,75,000
II. Assets
Non – Current Assets
Fixed Assets (Net)				1,50,000	1,00,000
10% Investments				1,50,000	1,25,000
Current Assets	31-03-18	31-03-17
Trade Receivable	40,000	20,000
Less provision for doubtful debts	15,000	10,000		25,000	10,000
Cash in hand				50,000	40,000
Total				3,75,000	2,75,000

Prepare a Cash Flow Statement.

The solution of Question 46 Chapter 5 of +2-B: - 

Cash Flow Statement

Particulars		Rs
(A) Cash Flow from Operating Activities
Net Profit as per balance sheet		50,000
Adjustment Non-Operating or Non-Cash items
Less: Non-Operating Incomes
Interest on investment @ 10% on 1,25,000		12,500
Cash operating Profit before Working Capital adj.		37,500
Add: Increase in Current Liabilities
Tarde Payable	25,000
Provision for doubtful debts	25,000
Less: Increase in Current Assets
Trade receivable	20,000	10,000
Cash flow from Operating Activities		47,500
(B) Cash flows from Investing Activities
Outflow of Cash
Purchase of Fixed Assets	50,000
Purchase of Investments	25,000
Inflow of Cash
Interest received on investments	12,500	62,500
Net cash used in investing Activities		62,500
(C) Cash flows from Financing Activities
Inflow of Cash
Issue of equity Share Capital	50,000
Outflow of Cash
Redemption of 10% Preference Shares	25,000	25,000
Net cash flow from financing activities		25,000
Total Cash flow (A + B + C)		10,000
Opening Balance Cash		40,000
Closing Balance Cash		50,000