Question 59 Chapter 5 of +2-B - USHA Publication 12 Class

Question 59 Chapter 5 of +2-B

 59. (Cash Flow Statement Showing Operating, Investing & Financing Activities) Prepare cash flow statement from the following as per AS-3 (Revised)

BALANCE SHEETS
Particulars	Note No.	31st March,2018	31st March,2017
I. Equity and Liabilities
Shareholders Fund :
Equity Share Capital		4,00,000	2,00,000
10% preference share capital		50,000	1,00,000
Reserves and Surplus
Balance in Statement of Profit and Loss		50,000	25,000
Current Liabilities
Trade Payable		75,000	50,000
Total		5,75,000	3,75,000
II. Assets
Non-Current Assets :
Tangible Assets
Machinery		1,50,000	1,00,000
Intangible Assets
Goodwill		5,000	10,000
Current Assets :
Inventories		70,000	50,000
Trade Receivable		1,25,000	65,000
Cash at Bank		75,000	50,000
Cash in hand		1,50,000	1,00,000
Total		5,75,000	3,75,000

Additional information
(i) Machinery having a book value of ₹ 20,000 was sold for ₹ 12,000
(ii) Dividend paid during the year ₹ 25,000
(iii) Depreciation provided during the year ₹ w20,000.
(iv) Preference capital was redeemed on 31.3.2018.

The solution of Question 59 Chapter 5 of +2-B: - 

Cash Flow Statement for the year ended 31st March 2016

Particulars		Rs
(A) Cash Flow from Operating Activities
Net Profit before Tax and Extraordinary Items*		25,000
Add: Dividend Paid		25,000
Adjustment of non-Cash & Non-Operating Items
Less: Goodwill	5,000
Loss on sale of machinery	8,000
Depreciation on Machinery	20,000	33,000
Cash operating Profit before Working Capital adj.		83,000
Add: Increase in Current Liabilities:
Trade Payable	25,000
Less: Increase in current Assets:
Inventories	20,000
Trade Receivables	60,000	55,000
Cash flow from Operating Activities		28,000
(B) Cash flows from Investing Activities
Inflow of Cash
Sale of Machinery		12,000
Outflow of Cash
Purchase of Machinery
Cash used in Investing Activities		90,000
Net cash used in investing Activities		78,000
(C) Cash flows from Financing Activities
Inflow of Cash
Issue of Share Capital	2,00,000
Outflow of Cash
Dividend paid	25,000
Redemption of preference share capital	50,000	1,25,000
Net cash flow from financing activities		1,25,000
Net Increase in Cash & Cash Equivalents (A + B + C)		75,000
Add: Cash & Cash equivalents in the beginning		1,50,000
Cash & Cash equivalents at the end		2,25,000

Working Note

Machinery Account

Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	1,00,000	By Depreciation	20,000
		By Bank – Sale	12,000
		By Profit & Loss A/c – Loss on Sale	8,000
To Bank –Purchase (Bal. fig.)	90,000	By Balance c/d	1,50,000
	1,90,000		1,90,000