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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the following information, calculate (a) Cash Flow from Investing Activities; and (b) Cash Flow from Financing Activities:
| Particulars | 31st March, 2024 (₹) | 31st March, 2025 (₹) |
|---|---|---|
| Plant and Machinery | 8,50,000 | 10,00,000 |
| Non-Current Investments | 40,000 | 1,00,000 |
| Land (at Cost) | 2,00,000 | 1,00,000 |
| Equity Share Capital | 20,00,000 | 30,00,000 |
| 10% Preference Share Capital | 2,00,000 | 1,00,000 |
| Securities Premium | – | 1,00,000 |
| 10% Debentures | 10,00,000 | 10,00,000 |
Additional Information:
(i) Depreciation charged on Plant and Machinery was ₹50,000.
(ii) Plant and Machinery of book value ₹60,000 was sold for ₹40,000.
(iii) Land was sold at a gain of ₹60,000.
(iv) Preference Shares were redeemed on 31st March, 2025 at a premium of 5%.
(v) Dividend on Equity Shares and Preference Shares for the year ended 31st March, 2024 was Nil, and for the year ended 31st March, 2025, Proposed Dividend on Equity Shares was 10%.
(vi) Fresh issue of Equity Shares was on 1st April, 2024.
Cash Flow Statement for the year ended 31st March, 2025
| I. Cash Flow from Investing Activities | ||
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| Proceeds from Sale of Plant and Machinery | 40,000 | |
| Proceeds from Sale of Land (WN2) | 1,60,000 | |
| Purchase of Plant and Machinery (WN1) | (2,60,000) | |
| Purchase of Non-Current Investments (WN3) | (60,000) | |
| Cash Used in Investing Activities | (1,20,000) | |
| II. Cash Flow from Financing Activities | ||
| Add: Issue of Equity Share Capital | 10,00,000 | |
| Securities Premium Received | 1,00,000 | 11,00,000 |
| Less: Redemption of Preference Shares | (1,00,000) | |
| Premium Paid on Redemption (5% of 1,00,000) | (5,000) | |
| Interest on Debentures Paid (10% of 10,00,000) | (1,00,000) | (2,05,000) |
| Cash Flow from Financing Activities | 8,95,000 | |
Note: The Proposed Dividend of 10% on Equity Shares for the year ended 31st March, 2025 is not yet a recognised liability (declared/approved only in the following year), so it does not feature in this year’s Cash Flow Statement.
Working Note 1: Plant and Machinery Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 8,50,000 | By Statement of Profit and Loss (Loss on Sale, 60,000 − 40,000) | 20,000 |
| To Bank A/c (Purchase, balancing figure) | 2,60,000 | By Bank A/c (Sale) | 40,000 |
| By Statement of Profit and Loss (Depreciation) | 50,000 | ||
| By Balance c/d | 10,00,000 | ||
| Total | 11,10,000 | Total | 11,10,000 |
Working Note 2: Land Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 2,00,000 | By Bank A/c (Sale, balancing figure) | 1,60,000 |
| To Statement of Profit and Loss (Gain) | 60,000 | By Balance c/d | 1,00,000 |
| Total | 2,60,000 | Total | 2,60,000 |
Working Note 3: Non-Current Investments Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 40,000 | By Balance c/d | 1,00,000 |
| To Bank A/c (Purchase, balancing figure) | 60,000 | ||
| Total | 1,00,000 | Total | 1,00,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 5 Q.38 - Cash Flow Statement", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 5 - Cash Flow Statement.
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