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

Question 38 Chapter 5 of +2-B

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:

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:

  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
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 8 X 6
100 12
  = Rs 5,000        
  = Rs 1,00,000 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 8 X 6
100 12
  = Rs 30,000        
  = Rs 2,75,000 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)

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

2 Book 3 min 225x300 - Question 38 Chapter 5 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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