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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the following details relating to Grow More Ltd., prepare a Cash Flow Statement:
Balance Sheet of Grow More Ltd. as at 31st March, 2025
| Particulars | Note No. | 31st March, 2025 (₹) | 31st March, 2024 (₹) |
|---|---|---|---|
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholders’ Funds | |||
| (a) Share Capital | 1 | 20,00,000 | 16,00,000 |
| (b) Reserves and Surplus | 2 | 6,00,000 | 4,20,000 |
| 2. Non-Current Liabilities — Long-term Borrowings: 10% Debentures | 4,00,000 | – | |
| 3. Current Liabilities | |||
| (a) Trade Payables | 14,00,000 | 16,40,000 | |
| (b) Short-term Provisions | 3 | 2,00,000 | 1,40,000 |
| Total | 46,00,000 | 38,00,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| (a) Fixed Assets (Tangible Assets) | 4 | 26,00,000 | 18,00,000 |
| (b) Non-Current Investments | 2,00,000 | – | |
| 2. Current Assets | |||
| (a) Inventories | 8,00,000 | 4,00,000 | |
| (b) Trade Receivables | 10,00,000 | 14,00,000 | |
| (c) Cash and Cash Equivalents | – | 2,00,000 | |
| Total | 46,00,000 | 38,00,000 | |
Note 1: Share Capital — Equity Shares of ₹100 each, fully paid: 20,00,000 (2025), 16,00,000 (2024).
Note 2: Reserves and Surplus — General Reserve: 4,00,000 (2025), 3,00,000 (2024); Surplus: 2,00,000 (2025), 1,20,000 (2024); Total: 6,00,000/4,20,000.
Note 3: Short-term Provisions — Provision for Tax: 2,00,000 (2025), 1,40,000 (2024).
Note 4: Tangible Assets — Plant and Machinery: 14,00,000 (2025), 10,00,000 (2024); Land and Buildings: 12,00,000 (2025), 8,00,000 (2024); Total: 26,00,000/18,00,000.
Additional Information:
1. Depreciation @ 25% was charged on the opening value of Plant and Machinery.
2. During the year, one old machine costing ₹1,00,000 (Written Down Value ₹40,000) was sold for ₹70,000.
3. ₹1,00,000 was paid as income tax during the year.
4. Proposed dividend for the year ended 31st March, 2025 was ₹4,00,000, and for the year ended 31st March, 2024 was ₹2,00,000.
5. During the current year, new debentures were issued on 1st October, 2024.
Cash Flow Statement
| I. Cash Flow from Operating Activities | ||
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| Net Profit as per Statement of Profit and Loss (2,00,000 − 1,20,000) | 80,000 | |
| Add: General Reserve (4,00,000 − 3,00,000) | 1,00,000 | |
| Add: Proposed Dividend (for year ended 2024, approved and paid this year) | 2,00,000 | |
| Add: Provision for Tax (WN2) | 1,60,000 | 4,60,000 |
| Net Profit before Tax and Extraordinary Items | 5,40,000 | |
| Add: Depreciation on Machinery (25% of 10,00,000) | 2,50,000 | |
| Add: Interest on Debentures (10% of 4,00,000 for 6 months, issued 1st October, 2024) | 20,000 | 2,70,000 |
| 8,10,000 | ||
| Less: Gain on Sale of Machinery (70,000 − 40,000) | (30,000) | |
| Operating Profit before Working Capital Changes | 7,80,000 | |
| Add: Decrease in Trade Receivables (14,00,000 − 10,00,000) | 4,00,000 | |
| Less: Decrease in Trade Payables (16,40,000 − 14,00,000) | (2,40,000) | |
| Less: Increase in Inventories (8,00,000 − 4,00,000) | (4,00,000) | (2,40,000) |
| Cash Generated from Operations | 5,40,000 | |
| Less: Tax Paid | (1,00,000) | |
| Cash Flow from Operating Activities | 4,40,000 | |
| II. Cash Flow from Investing Activities | ||
| Proceeds from Sale of Machinery | 70,000 | |
| Payments for Purchase of Plant and Machinery (WN1) | (6,90,000) | |
| Payments for Purchase of Land and Buildings (12,00,000 − 8,00,000) | (4,00,000) | |
| Payments for Purchase of Non-Current Investments | (2,00,000) | |
| Cash Used in Investing Activities | (12,20,000) | |
| III. Cash Flow from Financing Activities | ||
| Proceeds from Issue of Equity Shares (20,00,000 − 16,00,000) | 4,00,000 | |
| Proceeds from Issue of Debentures | 4,00,000 | |
| Payment of Interest on Debentures | (20,000) | |
| Payment of Dividend (for year ended 2024) | (2,00,000) | |
| Cash Flow from Financing Activities | 5,80,000 | |
| Net Decrease in Cash and Cash Equivalents | (2,00,000) | |
| Add: Opening Cash and Cash Equivalents | 2,00,000 | |
| Closing Cash and Cash Equivalents | Nil | |
Working Note 1: Plant and Machinery Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 10,00,000 | By Depreciation A/c | 2,50,000 |
| To Statement of Profit and Loss (Gain on Sale, 70,000 − 40,000) | 30,000 | By Bank A/c (Sale) | 70,000 |
| To Bank A/c (Purchase, balancing figure) | 6,90,000 | By Balance c/d | 14,00,000 |
| Total | 17,20,000 | Total | 17,20,000 |
Working Note 2: Provision for Tax Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Bank A/c (Tax Paid) | 1,00,000 | By Balance b/d | 1,40,000 |
| To Balance c/d | 2,00,000 | By Statement of Profit and Loss (Tax provided during the year, balancing figure) | 1,60,000 |
| Total | 3,00,000 | Total | 3,00,000 |
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.
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