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Question 51 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021

Question 51 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021
Question 51 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021

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Question 51 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021

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Balance Sheets of A as on 1.1.22 and 31.12.22 were as follows:

Particulars
Equity & Liabilities    
Equity Share Capital 6,00,0007,00,000
18% Preference 4,00,0002,00,000
Share Capital   
14% Debentures 2,00,0004,00,000
Reserves and Surplus 2,20,0005,40,000
Creditors 1,40,0002,90,000
Provision for Doubtful Debts 20,00030,000
                                                                                                      Total 15,80,00021,60,000
Assets   
Fixed Assets (Net) 10,20,00012,40,000
10% Investment 60,0001,60,000
Cash 80,0001,50,000
Debtors 2,00,0004,20,000
Stock 2,00,0001,80,000
Discount on Debentures 20,00010,000
Total 15,80,00021,60,000

You are informed that during the year:
(a) A machine with a book value of 80,000 was sold for 50,000.
(b) Depreciation charged during the year was 1,40,000.
(c) Preference Shares were redeemed on 31.3.2022 at a premium of 5%.
(d) An Interim Dividend @ 15%was paid on equity shares on 31.3. 2022.Prefrence Dividend was also paid on 31.3.2022.
(e) New shares and debentures were issued on 31.3.2022

The solution of Question 51 Chapter 8 – Unimax Publication Class 12 Part 2-2021 : –

CASH FLOW STATEMENT

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FOR THE YEAR ENDED 31st DEC,2022

Particulars
A. Cash Flow from Operating Activities   
Net Profit as per Reserve & surplus  3,20,000
Add: Pref. share Dividend 72,000 
Interim Dividend 90,0001,62,000
   4,82,000
Add: Less on sale of machinery 30,000 
Depreciation charged 1,40,000 
Premium on redemption of pref. shares 10,000 
Interest on debentures 28,000 
Discount on issue of debentures written off 10,0002,18,000
   7,00,000
Less: Interest on Investment (6000)(6000)
Operating profit before working Capital charges  6,94,000
Add: Increase in Current Liabilities   
Creditors                                                            1,50,000   
Provision on for doubtful debts                       10,000   
Decrease in Current Assets   
Stock                                                                      20,000 1,80,0001,80,000
   8,74,000
Add: Increase in Current liabilities   
Debtors (200,000)(200,000)
Cash Flow Operating Activities  6,54,000
B. Cash Flow from investing Activities   
Purchase of fixed assets (4,40,000) 
Purchase of fixed Investment (1,00,000) 
Receipt of Interest Investment 6000 
Sale of fixed assets 50,000(4,84,000)
Cash used in investing activities   
C. Cash Flow from Financing Activities   
Issue Equity share Capital 1,00,000 
Redemption of pref. Shares (2,00,000+10,000) (2,10,000) 
Issue of Debentures 200,000 
Payment of Equity Share dividend (90,000) 
Payment of preference share dividend (72,000) 
Payment of Interest on Debentures (28,000) 
Cash used in Financing Activities  (100,000)
Net Increase in cash and cash equivalents  70,000
Opening Cash Balance  80,000
Closing Cash Balance  1,50,000

Working Notes:

Fixed Assets  A/c

Particulars Particulars
To balance b/d10,20,000By Bank A/c (sale)50,000
To cash A/c (Purchase)4,40,000BY P&L A/c (loss on assets sold)30,000
  BY P&L A/c(Dep)1,40,000
  To balance c/d12,40,000
 14,60,000 14,60,000

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