Question 51 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021

Question 51 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021

Balance Sheets of A as on 1.1.22 and 31.12.22 were as follows:

Particulars		₹	₹
Equity & Liabilities
Equity Share Capital		6,00,000	7,00,000
18% Preference		4,00,000	2,00,000
Share Capital
14% Debentures		2,00,000	4,00,000
Reserves and Surplus		2,20,000	5,40,000
Creditors		1,40,000	2,90,000
Provision for Doubtful Debts		20,000	30,000
Total		15,80,000	21,60,000
Assets
Fixed Assets (Net)		10,20,000	12,40,000
10% Investment		60,000	1,60,000
Cash		80,000	1,50,000
Debtors		2,00,000	4,20,000
Stock		2,00,000	1,80,000
Discount on Debentures		20,000	10,000
Total		15,80,000	21,60,000

You are informed that during the year:
(a) A machine with a book value of 80,000 was sold for 50,000.
(b) Depreciation charged during the year was 1,40,000.
(c) Preference Shares were redeemed on 31.3.2022 at a premium of 5%.
(d) An Interim Dividend @ 15%was paid on equity shares on 31.3. 2022.Prefrence Dividend was also paid on 31.3.2022.
(e) New shares and debentures were issued on 31.3.2022

The solution of Question 51 Chapter 8 - Unimax Publication Class 12 Part 2-2021 : -

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31st DEC,2022

Particulars		₹	₹
A. Cash Flow from Operating Activities
Net Profit as per Reserve & surplus			3,20,000
Add: Pref. share Dividend		72,000
Interim Dividend		90,000	1,62,000
			4,82,000
Add: Less on sale of machinery		30,000
Depreciation charged		1,40,000
Premium on redemption of pref. shares		10,000
Interest on debentures		28,000
Discount on issue of debentures written off		10,000	2,18,000
			7,00,000
Less: Interest on Investment		(6000)	(6000)
Operating profit before working Capital charges			6,94,000
Add: Increase in Current Liabilities
Creditors                                                            1,50,000
Provision on for doubtful debts                       10,000
Decrease in Current Assets
Stock                                                                      20,000		1,80,000	1,80,000
			8,74,000
Add: Increase in Current liabilities
Debtors		(200,000)	(200,000)
Cash Flow Operating Activities			6,54,000
B. Cash Flow from investing Activities
Purchase of fixed assets		(4,40,000)
Purchase of fixed Investment		(1,00,000)
Receipt of Interest Investment		6000
Sale of fixed assets		50,000	(4,84,000)
Cash used in investing activities
C. Cash Flow from Financing Activities
Issue Equity share Capital		1,00,000
Redemption of pref. Shares (2,00,000+10,000)		(2,10,000)
Issue of Debentures		200,000
Payment of Equity Share dividend		(90,000)
Payment of preference share dividend		(72,000)
Payment of Interest on Debentures		(28,000)
Cash used in Financing Activities			(100,000)
Net Increase in cash and cash equivalents			70,000
Opening Cash Balance			80,000
Closing Cash Balance			1,50,000

Working Notes:

Fixed Assets  A/c

Particulars	₹	Particulars	₹
To balance b/d	10,20,000	By Bank A/c (sale)	50,000
To cash A/c (Purchase)	4,40,000	BY P&L A/c (loss on assets sold)	30,000
		BY P&L A/c(Dep)	1,40,000
		To balance c/d	12,40,000
	14,60,000		14,60,000