Question 38 Chapter 5 of +2-B
Table of Contents
Cash Flow from Financing Activities
38. From the following information, calculate Net Cash Flow from Operating Activities and Financing Activities:
| Particulars | 31st March, 2019 Rs | 31st March, 2018 Rs |
| Equity Share Capital | 13,75,000 | 11,25,000 |
| 5% Preference Share Capital | 5,00,000 | 7,50,000 |
| General Reserve | 3,75,000 | 3,00,000 |
| Surplus i.e., Balance in Statement of Profit and Loss | 3,75,000 | (3,50,000) |
| Securities Premium Reserve | 25,000 | — |
| Provision for Tax | 1,00,000 | 50,000 |
| Non-current Liabilities (8% Debenture) | 6,50,000 | 3,75,000 |
| Short-term Borrowings (8% Bank Loan) | 1,00,000 | 1,25,000 |
| Trade Payables | 5,00,000 | 2,50,000 |
| Trade Receivables and Inventories | 13,00,000 | 11,50,000 |
Additional Information:
- During the year additional debentures were issued at par on 1st October and Bank Loan was repaid on the same date.
- Dividend on Equity Shares @ 8% was paid on Opening Balance.
- Income tax Rs 1,12,500 has been provided during the year.
- 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 |
||
| Particulars |
Rs |
|
| I. Cash Flow from Financing Activities | ||
| Profit as per Statement of Profit and Loss | 7,25,000 | |
| Items to be Added: | ||
| Dividend on Equity Shares | 90,000 | |
| Dividend on Preference Shares | 37,500 | |
| Interest on Debentures | 41,000 | |
| Interest on Bank Loan | 9,000 | |
| Provision for Tax | 1,12,500 | |
| Transfer to General Reserve | 75,000 | 3,65,000 |
| Operating Profit before Working Capital Adjustments | 10,90,000 | |
| Less: Increase in Current Assets | ||
| Trade Receivables & Inventories | 1,50,000 | |
| Add: Increase in Current Liabilities | ||
| Trade Payables | 2,50,000 | 1,00,000 |
| 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 Shares | 2,50,000 | |
| Proceeds from Issue of Debentures | 2,75,000 | |
| Increase in Securities Premium Reserve | 25,000 | 5,50,000 |
| Less: Dividend on Equity Shares | 90,000 | |
| Less: Dividend on Preference Shares | 37,500 | |
| Less: Interest on Bank Loan* | 9,000 | |
| Less: Interest on Debentures* | 41,000 | |
| Less: Redemption of Preference Shares | 2,50,000 | |
| Less: Repayment of Bank Loan | 25,000 | 4,52,500 |
| Cash Flows from Financing Activity |
97,500 | |
| * Interest on Bank Loan | = | Rs 1,25,000 | X | 8 | X | 6 |
| 100 | 12 | |||||
| = | Rs 5,000 |
| = | Rs 1,00,000 | X | 8 | X | 6 | |
| 100 | 12 | |||||
| = | Rs 4,000 |
| Total Interest | = | Rs 5,000 + Rs 4,000 |
| = | Rs 9,000 |
| * Interest on Debentures | = | Rs 3,75,000 | X | 8 | X | 6 |
| 100 | 12 | |||||
| = | Rs 30,000 |
| = | Rs 2,75,000 | X | 8 | X | 6 | |
| 100 | 12 | |||||
| = | 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)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
