Question 35 Chapter 5 of +2-B

Question 35 Chapter 5 of +2-B

Indirect Method

35. (Cash Flow from Operating Activities) From the following balance sheet of Enclotek Ltd. as on 31-3-2017 and 31-3-2018 and the additional information provided. Calculate the cash flow from operating activities.

Balance Sheet of AB LTD.
ParticularsFigures as at the end of the current reporting periodFigures as at the end of the previous reporting period
I. Equity and Liabilities  
 Shareholders Fund :   
Equity Share Capital4,50,0004,50,000
5% Preference share capital2,00,0003,00,000
Reserves and surplus  
Statement of Profit and Loss 2,00,000(1,00,000)
General Reserve1,50,0001,20,000
Preliminary Expenses-5,000-25,000
Non-Current Liabilities  
Long-term borrowings :  
8% Debentures3,00,0002,00,000
Current Liabilities  
Trade Payables1,10,0001,08,000
Output IGST10,0002,000
II. Assets  
Non –Current Assets  
Tangible Assets  
Fixed Assets (Net) 8,60,0006,20,000
Investments 1,25,00080,000
Intangible Assets :   
Goodwill 10,00015,000
Current Assets   
Inventories 4,20,0003,40,000
Total 14,15,00010,55,000


The solution of Question 35 Chapter 5 of +2-B: – 

Cash Flow from Operating Activities
Net Profit as per Statement of Profit & Loss 3,00,000
Add: Goodwill Written off5,000 
Transfer to General Reserve30,000 
Preliminary expenses are written off20,000 
Depreciation on fixed assets60,000 
Premium on redemption of shares5,000 
Interest on debentures*18,000 
Preference Dividend paid15,000 
Proposed equity dividend36,0001,89,000
Cash operating profit before the change in working capital 4,89,000
Add: Increase in Current Liabilities  
Sundry Creditors2,000 
Output IGST8,00010,000
Less: Increase in Current Assets  
Inventories 80,000
Cash Flow from Operating activities 4,11,000

Working Note
1. Interest on Debenture 80,000

AmountRate of interestMonthInterest Value
₹ 2,00,0008%12 Months₹ 16,000
₹ 1,00,0008%3 Months₹ 2,000
   ₹ 8,000


Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 35 Chapter 5 of +2-B  - USHA Publication 12 Class
T.S. Grewal’s Analysis of Financial Statement

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