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Question 41 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021

Question 41 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021
Question 41 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021

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Question 41 Chapter 8 – Unimax Publication Class 12 Part 2 – 2021

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41. Following are the Balance Sheets of MDH Ltd .as on 31st December 2021 and 2022.

BALANCE SHEETS AS ON DECEMBER 2021 AND 2022

Particulars20212022
I. Equity and liabilities  
Share Capital1,80,0002,20,000
General Reserve15,00020,000
Profit and Loss A/c9,00013,000
Debentures1,00,00080,000
Creditors30,00045,000
Outstanding Wages6,0007,000
Total3,40,0003,85,000
Assets  
Machinery  
(at cost)3,00,0004,00,000
Less :  
Depreciation(1,20,000)(1,60,000)
 1,80,0002,40,000
Building1,20,0001,00,000
Goodwill9,0006,000
Stock12,00014,000
Debtors8,00012,000
Cash11,00013,000
Total3,40,0003,85,000

Additional Information:
(a)Depreciation provided during the year was 60,000.
(b)A piece of machinery costing 70,000 sold at 20% loss on book value.
Prepare Cash Flow Statement as per AS-3(Revised).

The solution of Question 41 Chapter 8 – Unimax Publication Class 12 Part 2-2021 : –

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 MDH LTD. CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DEC. 2022

Particulars
(A)cash flow from operating activities   
Net Profit as per Balance Sheet  4,000
Add: Transfer to General Reserve  5,000
Profit (before tax)  9,000
Add: Non-Cash items   
Depreciation on Machinery60,000  
Depreciation on Building20,000  
Loss on sale of machinery10,000  
Goodwill written off3,00093,00093,000
Operating Profit before Working Capital Charges  1,02,000
Add: Increase in Current Liabilities   
Creditors15,000  
Outstanding wages1,00016,00016,000
   1,18,000
Add: Increase in Current Assets   
Stock(2,000)  
Debtors(4,000)(6,000)(6,000)
Cash from Operating Activities  1,12,000
(b)Cash Flow from Investing Activities   
Purchase of Machinery (1,70,000) 
Sale of Machinery 40,000 
Cash used in Investing Activities  (1,30,000)
(c)Cash Flow from Financing Activities   
Issue of Share Capital 40,000 
Redemption of Debentures (20,000) 
Cash from Financing Activities  20,000
Net Increase in cash and cash Equivalents  2,000
Opening cash balance  11,000
Closing cash balance  13,000

Working Notes:

MACHINERY A/C

Particulars Particulars
To balance b/d3,00,000By Dep. A/c20,000
To bank A/c1,70,000By P& L A/c (Loss on sale)10,000
(Purchase of machinery) By Bank A/c (sale)40,000
  By Balance c/d4,00,000
 4,70,000 4,70,000

DEPRECIATION A/C

Particulars Particulars
To Machinery A/c20,000By Balance b/d1,20,000
(Dep on machinery sold) [B.F] By P&L A/c Dep.)60,000
To balance c/d1,60,000  
 1,80,000 1,80,000

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What is the cash flow statement? why do we need to prepare?

Unimax Publication – Accountancy PSEB Class 12 – Volume I – Solution

Unimax Publication – Accountancy PSEB (Class 12) – Part – II – Solution

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