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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the following Balance Sheet of Mishi Ltd. as at 31st March, 2025, prepare a Cash Flow Statement:
| Particulars | Note No. | 31st March, 2025 (₹) | 31st March, 2024 (₹) |
|---|---|---|---|
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholders’ Funds | |||
| (a) Share Capital | 16,00,000 | 12,00,000 | |
| (b) Reserves and Surplus | 1 | 6,60,000 | 4,40,000 |
| 2. Non-Current Liabilities — Long-term Borrowings (10% Debentures) | 3,20,000 | 2,00,000 | |
| 3. Current Liabilities | |||
| (a) Short-term Borrowing (Bank Loan) | 80,000 | 1,10,000 | |
| (b) Trade Payables | 1,50,000 | 1,80,000 | |
| Total | 28,10,000 | 21,30,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| (a) Fixed Assets — Tangible | 2 | 19,00,000 | 12,10,000 |
| (b) Non-Current Investments | 2,70,000 | 2,00,000 | |
| 2. Current Assets | |||
| (a) Current Investments | 1,60,000 | 80,000 | |
| (b) Trade Receivables | 1,80,000 | 4,00,000 | |
| (c) Cash and Cash Equivalents | 3 | 3,00,000 | 2,40,000 |
| Total | 28,10,000 | 21,30,000 | |
Note 1: Reserves and Surplus — Securities Premium Reserve: 20,000/Nil; General Reserve: 3,00,000/2,40,000; Surplus: 3,40,000/2,00,000; Total: 6,60,000/4,40,000.
Note 2: Fixed Assets — Tangible — Machinery (Cost): 21,40,000/14,00,000; Less: Accumulated Depreciation: 2,40,000/1,90,000; Net: 19,00,000/12,10,000.
Note 3: Cash and Cash Equivalents — Cash in Hand: 1,40,000/1,10,000; Bank Balance: 1,60,000/1,30,000; Total: 3,00,000/2,40,000.
Additional Information:
(i) During the year, Machinery costing ₹1,40,000 (accumulated depreciation provided thereon ₹1,10,000) was sold for ₹20,000.
(ii) During the year, Non-Current Investments costing ₹80,000 were sold at a profit of ₹16,000.
Cash Flow Statement for the year ended 31st March, 2025
| A. Cash Flow from Operating Activities | ||
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| Profit as per Statement of Profit and Loss (3,40,000 − 2,00,000) | 1,40,000 | |
| Add: Transfer to General Reserve (3,00,000 − 2,40,000) | 60,000 | |
| Profit Before Taxation | 2,00,000 | |
| Items to be Added: | ||
| Depreciation (WN2) | 1,60,000 | |
| Debenture Interest (10% of 2,00,000, opening balance, assuming new Debentures were issued at the end of the year) | 20,000 | |
| Loss on Sale of Fixed Assets (WN1) | 10,000 | |
| Items to be Deducted: | ||
| Profit on Sale of Investments (WN3) | (16,000) | 1,74,000 |
| Operating Profit before Working Capital Changes | 3,74,000 | |
| Less: Decrease in Trade Payables (1,80,000 − 1,50,000) | (30,000) | |
| Add: Decrease in Trade Receivables (4,00,000 − 1,80,000) | 2,20,000 | 1,90,000 |
| Cash Generated from Operations | 5,64,000 | |
| Net Cash Flow from Operating Activities | 5,64,000 | |
| B. Cash Flow from Investing Activities | ||
| Sale of Fixed Assets | 20,000 | |
| Sale of Non-Current Investments (WN3) | 96,000 | |
| Purchase of Non-Current Investments (WN3) | (1,50,000) | |
| Purchase of Fixed Assets (WN1) | (8,80,000) | |
| Net Cash Used in Investing Activities | (9,14,000) | |
| C. Cash Flow from Financing Activities | ||
| Proceeds from Issue of Share Capital | 4,00,000 | |
| Proceeds from Issue of Debentures | 1,20,000 | |
| Securities Premium Reserve | 20,000 | |
| Repayment of Bank Loan | (30,000) | |
| Interest Paid | (20,000) | |
| Net Cash Flow from Financing Activities | 4,90,000 | |
| D. Net Increase in Cash and Cash Equivalents (A + B + C) | ||
| Net Increase in Cash and Cash Equivalents | 1,40,000 | |
| Add: Cash and Cash Equivalents at the beginning of the period (1,10,000 + 1,30,000 + 80,000) | 3,20,000 | |
| Cash and Cash Equivalents at the end of the period (1,40,000 + 1,60,000 + 1,60,000) | 4,60,000 | |
Working Note 1: Fixed Assets Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 14,00,000 | By Bank A/c (Sale) | 20,000 |
| To Bank A/c (Purchase, balancing figure) | 8,80,000 | By Accumulated Depreciation A/c | 1,10,000 |
| By Statement of Profit and Loss (Loss on Sale) | 10,000 | ||
| By Balance c/d | 21,40,000 | ||
| Total | 22,80,000 | Total | 22,80,000 |
Working Note 2: Accumulated Depreciation Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Fixed Assets A/c | 1,10,000 | By Balance b/d | 1,90,000 |
| To Balance c/d | 2,40,000 | By Statement of Profit and Loss (Depreciation charged, balancing figure) | 1,60,000 |
| Total | 3,50,000 | Total | 3,50,000 |
Working Note 3: Non-Current Investments Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 2,00,000 | By Bank A/c (Sale, 80,000 + 16,000) | 96,000 |
| To Statement of Profit and Loss (Profit on Sale) | 16,000 | By Balance c/d | 2,70,000 |
| To Bank A/c (Purchase, balancing figure) | 1,50,000 | ||
| Total | 3,66,000 | Total | 3,66,000 |
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.
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