Question 46 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 46 Chapter 5 of +2-B

Table of Contents

46. Following was the Balance Sheet of M.M. Ltd. as at 31st March, 2015:

Notes to Accounts

Particulars	31st March, 2015 (Rs)	31st March, 2014 (Rs)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	2,00,000	-50,000
	2,00,000	-50,000
2. Long-term Borrowings
12% Debentures	4,50,000	5,00,000
	4,50,000	5,00,000
3. Short-term Borrowings
Bank Overdraft	1,50,000	50,000
	1,50,000	50,000
4. Short-term Provisions
Provision for Tax	70,000	90,000
	70,000	90,000
5. Tangible Assets
Machinery	12,03,000	8,21,000
Less: Accumulated Depreciation	(2,00,000)	(1,01,000)
	10,03,000	7,20,000

Notes to Accounts :-

Additional Information:
1. 12% Debentures were redeemed on 31st March, 2015.
2. Tax 70,000 was paid during the year.
Prepare Cash Flow Statement.

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Cash Flow Statement for the year ended 31st March,2015
Particulars		Rs
I. Cash Flow from Financing Activities
Profit as per Statement of Profit and Loss :
Closing Balance of Profit & Loss	2,00,000
Less: Opening Balance of Profit & Loss	(50,000)	2,50,000
Profit Before Taxation		2,50,000
Items to be Added:
Depreciation	99,000
Intangible Assets Written off	10,000
Interest on Debentures	60,000
Provision for Tax	50,000	2,19,000
Operating Profit before Working Capital Adjustments		4,69,000
Less: Increase in Current Assets
Inventories		62,000
Cash Generated from Operations		4,07,000
Less: Tax Paid		70,000
Net Cash Flow from Operating Activities		3,37,000
II. Cash Flow from Financing Activities
Purchase of Fixed Assets	3,82,000
Purchase of Non-Current Investments	25,000	4,07,000
Net Cash Used in Investing Activities		4,07,000
III: Cash Flow from Financing Activities
Proceeds from Issue of Shares	1,00,000
Redemption of Debentures	50,000
Interest Paid on Debentures	60,000
Increase in Bank Overdraft	1,00,000	90,000
Net Cash Flow from Financing Activities		90,000
IV. Net Decrease in Cash and Cash Equivalents		20,000
Add: Cash and Cash Equivalents in the beginning of the period		1,20,000
Cash and Cash Equivalents at the end of the period		1,40,000

Working Notes :- I

Provision for Tax Account
Particulars	Rs	Particular	Rs
To Bank A/c	70,000	By Bank A/c (Sale)	90,000
To Balance c/d	70,000	By Statement of Profit and Loss	50,000
	1,40,000		1,40,000