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

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

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

Particulars
Equity & Liabilities      
Equity Share Capital   6,00,000 7,00,000
18% Preference   4,00,000 2,00,000
Share Capital      
14% Debentures   2,00,000 4,00,000
Reserves and Surplus   2,20,000 5,40,000
Creditors   1,40,000 2,90,000
Provision for Doubtful Debts   20,000 30,000
                                                                                                      Total   15,80,000 21,60,000
Assets      
Fixed Assets (Net)   10,20,000 12,40,000
10% Investment   60,000 1,60,000
Cash   80,000 1,50,000
Debtors   2,00,000 4,20,000
Stock   2,00,000 1,80,000
Discount on Debentures   20,000 10,000
Total   15,80,000 21,60,000

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

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   90,000 1,62,000
      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   10,000 2,18,000
      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   1,80,000 1,80,000
      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/d 10,20,000 By Bank A/c (sale) 50,000
To cash A/c (Purchase) 4,40,000 BY P&L A/c (loss on assets sold) 30,000
    BY P&L A/c(Dep) 1,40,000
    To balance c/d 12,40,000
  14,60,000   14,60,000
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