Question 45 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 45 Chapter 5 of +2-B

Table of Contents

45. From the following Balance Sheet of Kumar Ltd. as at 31st March, 2019, prepare Cash Flow Statement:

Notes to Accounts

Particulars	31st March,	31st March, 2018 (Rs)
	2019 (Rs)
1. Share Capital
Equity Share Capital	15,00,000	10,00,000
7% Preference Share Capital	1,00,000	40,000
	16,00,000	10,40,000
2. Reserves and Surplus
General Reserve	4,00,000	60,000
Surplus, i.e., Balance in Statement of Profit and Loss	1,50,000	2,00,000
	5,50,000	2,60,000

Additional Information:
1. During a year, a machinery costing 20,000 was sold for 6,000.
2. Dividend paid during the year 50,000.

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Cash Flow Statement for the year ended 31st March,2019
Particulars		Rs
I. Cash Flow from Financing Activities
Profit as per Statement of Profit and Loss :
Closing Balance of Profit & Loss	1,50,000
Less: Opening Balance of Profit & Loss	2,00,000	(50,000)
Transfer to General Reserve	3,40,000
Dividend Paid	50,000	3,90,000
Profit Before Taxation		3,40,000
Items to be Added:
Interest Paid	54,000
Loss on Sale of Machinery	14,000	68,000
Operating Profit before Working Capital Adjustments		4,08,000
Less: Increase in Current Assets
Inventories	1,00,000
Trade Receivables	1,00,000
Add: Increase in Current Liabilities
Trade Payables	3,50,000	3,50,000
Cash Generated from Operations		5,58,000
Less: Tax Paid		…
Net Cash Flow from Operating Activities		5,58,000
II. Cash Flow from Financing Activities
Sale of Machinery	6,000
Purchase of Machinery (WN II)	5,20,000	5,14,000
Net Cash Used in Investing Activities		5,14,000
III: Cash Flow from Financing Activities
Proceeds from Issue of Equity Shares	5,00,000
Proceeds from 7% Preference Shares	60,000
Less : Dividend Paid	50,000
Less: Redemption of 9% Debentures	2,00,000
Less: Interest Paid	54,000	2,56,000
Net Cash Flow from Financing Activities		2,56,000
IV. Net Decrease in Cash and Cash Equivalents		3,00,000
Add: Cash and Cash Equivalents in the beginning of the period		2,00,000
Cash and Cash Equivalents at the end of the period		5,00,000

Fixed Assets Account
Particulars	Rs	Particular	Rs
To Balance b/d	15,00,000	By Bank A/c (Sale)	6,000
To Bank A/c (Purchase) (Bal. Fig.)	5,20,000	By Loss on Sale (Profit and Loss A/c )	14,000
		By Balance c/d	20,00,000
	20,20,000		20,20,000