Question 38 Chapter 5 of +2-B – T.S. Grewal 12 Class

Question 38 Chapter 5 of +2-B
Question No.38 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution


Question 38 Chapter 5 of +2-B


Cash Flow from Financing Activities

38. From the following information, calculate Net Cash Flow from Operating Activities and Financing Activities:

Particulars31st March, 2019 Rs31st March, 2018 Rs 
Equity Share Capital13,75,00011,25,000
5% Preference Share Capital 5,00,0007,50,000
General Reserve3,75,0003,00,000
Surplus i.e., Balance in Statement of Profit and Loss3,75,000(3,50,000)
Securities Premium Reserve 25,000
Provision for Tax1,00,00050,000
Non-current Liabilities (8% Debenture)6,50,0003,75,000
Short-term Borrowings (8% Bank Loan)1,00,0001,25,000
Trade Payables 5,00,0002,50,000
Trade Receivables and Inventories13,00,00011,50,000

Additional Information:

  1. During the year additional debentures were issued at par on 1st October and Bank Loan was repaid on the same date.
  2. Dividend on Equity Shares @ 8% was paid on Opening Balance.
  3. Income tax Rs 1,12,500 has been provided during the year.
  4. Preference shares were redeemed at par at the end of the year.




The solution of Question 38 Chapter 4 of +2-B: –


Cash Flow From for the year ended 31st March, 2019
I. Cash Flow from Financing Activities  
Profit as per Statement of Profit and Loss 7,25,000
Items to be Added:  
Dividend on Equity Shares90,000 
Dividend on Preference Shares37,500 
Interest on Debentures41,000 
Interest on Bank Loan9,000 
Provision for Tax1,12,500 
Transfer to General Reserve75,0003,65,000
Operating Profit before Working Capital Adjustments 10,90,000
Less: Increase in Current Assets  
Trade Receivables & Inventories1,50,000 
Add: Increase in Current Liabilities  
Trade Payables2,50,0001,00,000
Cash Generated from Operations 11,90,000
Less: Taxes Paid 62,500
Cash Flow from Operating Activities 11,27,500
II. Cash Flow from Financing Activities  
Proceeds from Issue of Equity Shares2,50,000 
Proceeds from Issue of Debentures2,75,000 
Increase in Securities Premium Reserve25,0005,50,000
Less: Dividend on Equity Shares90,000 
Less: Dividend on Preference Shares37,500 
Less: Interest on Bank Loan*9,000 
Less: Interest on Debentures*41,000 
Less: Redemption of Preference Shares2,50,000 
Less: Repayment of Bank Loan25,0004,52,500
Cash Flows from Financing Activity


* Interest on Bank Loan=Rs 1,25,0008X6
 =Rs 5,000    
 =Rs 1,00,0008X6
 =Rs 4,000    
Total Interest=Rs 5,000 + Rs 4,000
 =Rs 9,000


* Interest on Debentures=Rs 3,75,0008X6
 =Rs 30,000    
 =Rs 2,75,0008X6
 =Rs 11,000    


Total Interest=Rs 30,000 + Rs 11,000
 =Rs 41,000

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


T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements


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