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Question 52 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021

Question 52 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021
Question 52 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021

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Question 52 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021 52. From the following particular, prepare cash Flow Statement:

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Particulars20222021
Equity & Liabilities  
2. Non-Current Liabilities (15%Debentures)  
(a) Equity Share Capital (note 1)1,11,60090,000
(b) Reserve and Surplus(note2)16,80012,000
1. Non -Current Assets34,00022,000
3. Current Liabilities  
Trade Payables22,00024,000
Other Current Liabilities (Bank Overdraft)11,60025,000
Total1,96,0001,73,000
B. Assets  
2. Current Assets  
Tangible Fixed Assets (net)49,00055,000
Intangible Assets(patents)1,0005,000
Non-Current Investment20,00010,000
Short-term Loans & Advances (Adv. Tax)  
Current Investment5,0002,000
Cash and Cash Equivalents2,000400
Short -term Loans & Advances (Adv. Tax)9,400
Other Current Assets1,09,6001,00,600
Total1,96,0001,73,000

Additional Information: A machine costing 20,000 (depreciation provided thereon 6,000) was sold for 10,000. The depreciation charged during the year was 10,000. An interim Dividend paid during the year 9,000. Advance tax paid 9,400 during the year.

It has been assumed that new debentures have been issued at the end of the current accounting year.

The solution of Question 52 Chapter 8 – Unimax Publication Class 12 Part 2-2021: –

CASH FLOW STATEMENT

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FOR THE YEAR ENDED 31st DEC,2022

Particulars20222021
I. Cash Flow from Operating Activities 11,800
A. Net Profit before tax  
B. Adjustments for Non- Cash and Non-Operating items:  
Deprecation on Fixed Assets10,000 
Loss on Sale of Machinery4,000 
Interest on Debentures3,300 
Dividend on Pref. Share4,200 
Patents amortized4,00025,500
C. Operating Profit before Working Capital Changes 37,300
Dividend on pref. Share  
Increase in Other Current Assets(9000) 
Increase in Trade Payables(2000)(11,000)
E. Net Cash Flow from Operating Activities before tax 26,000
F. Less: Tax paid (9400)
G. Net Cash Inflow from Operating Activities after Tax 16,900
II. Cash Flow from investing Activities:  
Sale of Machinery 10,000
Purchase of Fixed Assets (18,000)
Purchase of Non-current Investments (10,000)
Net Cash used in investing Activities (18000)
III. Cash Flow from Financing Activities  
Issues of share capital (25,000+2,000) 27,000
Issue of debentures 12,000
Interest paid on debentures  (3,300)
Interim dividend paid on equity shares (9000)
Dividend on pref. share (4200)
Dec. in bank overdraft (13,400)
Final dividend paid (10,000)
Redemption of preference shares (3,400)
Net cash inflow from financing activities 5700
iv. net increase in cash and cash equivalents (I + ii + iii) 4600
v. opening cash and cash equivalents 2400
vi. closing cash and cash equivalents 7000

Working notes:

NOTE 1: SHARE CAPITAL

Particulars31.03.202231.03.2021
Equity Share Capital 80,00055,000
12% Preference Share Capital 31,60035,000
  1,11,60090,000
  1. Advanced tax has not been added back because it has not yet been provided in P& L A/c.
  1. Fixed Assets Account
Particulars Particulars
To balance b/d55,000By depreciation a/c.10,000
To bank a/c (purchase) (b. f)18,000By bank a/c (sale)10,000
  By P&L a/c (loss)4,000
  By balance c/d49,000
 73,000 73,000
1. calculations of net profit before tax  
Closing balance of P & L a/c 11,800
Less: opening balance of P& L a/c (8,000)
Less: Transfer from reserve (1,000)
Add: interim dividend on equity shares 9000
Net profit before tax 11,800

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