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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Balance Sheet of Varun Ltd. as at 31st March, 2025 is as follows:
| Particulars | 31st March, 2025 (₹) | 31st March, 2024 (₹) |
|---|---|---|
| I. EQUITY AND LIABILITIES | ||
| 1. Shareholders’ Funds — Share Capital | 2,00,000 | 2,00,000 |
| Reserves and Surplus — Surplus, i.e., Balance in Statement of Profit and Loss | 98,000 | 96,000 |
| 2. Non-Current Liabilities — Long-term Borrowings (Note 1) | 90,000 | 60,000 |
| 3. Current Liabilities — Trade Payables | 82,000 | 72,000 |
| Total | 4,70,000 | 4,28,000 |
| II. ASSETS | ||
| 1. Non-Current Assets — Fixed Assets (Tangible, Note 2) | 3,42,000 | 3,00,000 |
| 2. Current Assets | ||
| (a) Inventories | 44,000 | 50,000 |
| (b) Trade Receivables | 76,800 | 70,000 |
| (c) Cash and Cash Equivalents | 7,200 | 8,000 |
| Total | 4,70,000 | 4,28,000 |
Note 1: Long-term Borrowings — Loan from Z Ltd.: 40,000 (2025), Nil (2024); Loan from Bank: 50,000 (2025), 60,000 (2024).
Note 2: Fixed Assets (Tangible) — Land: 60,000 (2025), 40,000 (2024); Building: 1,10,000 (2025), 1,00,000 (2024); Machinery (Cost): 2,44,000 (2025), 2,14,000 (2024); Less: Accumulated Depreciation: 72,000 (2025), 54,000 (2024); Net Machinery: 1,72,000 (2025), 1,60,000 (2024).
Additional Information: During the year, ₹52,000 was paid as interim dividend.
Prepare Cash Flow Statement.
Cash Flow Statement
| I. Cash Flow from Operating Activities | ||
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| Net Profit as per Statement of Profit and Loss (98,000 − 96,000) | 2,000 | |
| Add: Interim Dividend | 52,000 | |
| Net Profit before Tax and Extraordinary Items | 54,000 | |
| Add: Depreciation on Machinery | 18,000 | |
| Operating Profit before Working Capital Changes | 72,000 | |
| Add: Increase in Trade Payables (82,000 − 72,000) | 10,000 | |
| Add: Decrease in Inventories (50,000 − 44,000) | 6,000 | 16,000 |
| 88,000 | ||
| Less: Increase in Trade Receivables (76,800 − 70,000) | (6,800) | |
| Cash Generated from Operations | 81,200 | |
| Cash Flow from Operating Activities | 81,200 | |
| II. Cash Flow from Investing Activities | ||
| Payment for Purchase of Land (60,000 − 40,000) | (20,000) | |
| Payment for Purchase of Building (1,10,000 − 1,00,000) | (10,000) | |
| Payment for Purchase of Machinery (2,44,000 − 2,14,000) | (30,000) | |
| Cash Used in Investing Activities | (60,000) | |
| III. Cash Flow from Financing Activities | ||
| Proceeds from Loan from Z Ltd. | 40,000 | |
| Repayment of Bank Loan (60,000 − 50,000) | (10,000) | |
| Payment of Interim Dividend | (52,000) | |
| Cash Used in Financing Activities | (22,000) | |
| Net Decrease in Cash and Cash Equivalents (81,200 − 60,000 − 22,000) | (800) | |
| Add: Opening Cash and Cash Equivalents | 8,000 | |
| Closing Cash and Cash Equivalents | 7,200 | |
Working Note: Provision for Depreciation Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance c/d | 72,000 | By Balance b/d | 54,000 |
| By Statement of Profit and Loss (Depreciation provided during the year, balancing figure) | 18,000 | ||
| Total | 72,000 | Total | 72,000 |
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.42 - 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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