Question 49 Chapter 5 of +2-B - USHA Publication 12 Class

Question 49 Chapter 5 of +2-B

PREPARING OF CASH FLOW STATEMENT (WITH ADJUSTMENT)

49. (CFS Showing Operating, Investing & Financing Activities) From the following Balance Sheets, prepare a Cash Flow Statement :

Particulars	Note No.	31st March,2018	31st March,2018
I. Equity and Liabilities
Shareholders Fund :
Equity Share Capital		2,00,000	1,50,000
12% Preference Share Capital		50,000	75,000
Reserves and surplus
General Reserve		35,000	20,000
Balance in Statement of Profit and Loss		24,000	15,000
III. Current Liabilities
Trade Payable		49,500	37,500
		3,58,500	2,97,500
II. Assets
Non-Current Assets :
Tangible Assets
Building		60,000	80,000
Plant		1,00,000	40,000
Intangible Assets :
Goodwill		20,000	36,000
Current Assets
Inventories		15,000	10,000
Trade Receivable		1,54,500	1,19,000
Cash and Cash Equivalents
Cash in hand		9,000	12,500
		3,58,000	2,97,500

Prepare a Cash Flow Statement.

The solution of Question 49 Chapter 5 of +2-B: - 

Cash Flow Statement

Particulars		Rs
(A) Cash Flow from Operating Activities
Net Profit before taxation
Profit as per the statement	9,000
Add: Transfer to General Reserve	15,000	24,000
Adjustments of Non-cash or Non-Operating Items :
Add: Depreciation on Plant	10,000
Depreciation on Building	60,000
Goodwill amortize	16,000	86,000
Cash operating Profit before Working Capital adj.		1,10,000
Add: Increase in Current Liabilities
Trade Payable	12,000
Less: Increase in Current Assets
Trade Receivable	35,500
Inventories	5,000	28,500
Cash used in Operating Activities		81,500
(B) Cash flows from Investing Activities
Outflow of Cash
Purchase of Building*	40,000
Purchase of Plant**	70,000	1,10,000
Net cash used in investing Activities		1,10,000
(C) Cash flows from Financing Activities
Inflow of Cash
Share Capital Issued	50,000
Outflow of Cash
Redemption of 10% Preference Shares	25,000	25,000
Net cash flow from financing activities		25,000
Net decrease in cash & Cash equivalents (A + B + C)		3,500
Add: cash equivalent in the beginning of year		12,500
Cash equivalent at the end of year		9,000

Working Note

Building Amount *

Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	80,000	By Depreciation	60,000
To Bank –Purchase (Bal. fig.)	40,000	By Balance c/d	60,000
	1,20,000		1,20,000

 

Plant Amount *

Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	40,000	By Depreciation	10,000
To Bank –Purchase (Bal. fig.)	70,000	By Balance c/d	1,00,000
	1,10,000		1,10,000