Question 53 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 53 Chapter 5 of +2-B

Table of Contents

The solution of Question 53 Chapter 4 of +2-B: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

53. From the following Balance Sheet of Akash Ltd. as at 31st March 2014:

Particulars	Note No.	31st March, 2018 Rs	31st March, 2017 Rs
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital		15,00,000	2,00,000
(b) Reserves and Surplus	1	2,50,000	80,500
2. Non-Current Liabilities
Long-term Borrowings		2,00,000	1,25,000
2. Current Liabilities
(a) Short-term Borrowings: Bank Loan	2	12,000	10,000
(b) Trade Payables		15,000	83,000
(c) Short-term Provisions: Provision for Tax	3	18,000	11,000
Total		19,95,000	17,39,000
II. ASSETS
1. Non-Current Assets
Fixed Assets :
(i) Tangible Assets	4	18,60,000	16,10,000
(ii) Intangible Assets: Goodwill		50,000	30,000
2. Current Assets
(a) Current Investments		8,000	5,000
(b) Inventories		37,000	59,000
(b) Trade Receivables		26,000	23,000
(c) Cash and Cash Equivalents		14,000	12,000
Total		19,95,000	17,39,000

Notes to Accounts

Particulars	31st March, 2014 ( Rs)	31st March, 2013 ( Rs)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	2,50,000	1,10,000
	2,50,000	1,10,000
2. 2. Short-term Borrowings :
Bank Overdraft	12,000	10,000
	12,000	10,000
3. Short-term Provisions
Provision for Tax	18,000	11,000
	18,000	11,000
4. Tangible Assets :
Machinery	20,00,000	17,00,000
Less: Accumulated Depreciation	(1,40,000)	-90,000
	18,60,000	16,10,000
5. Intangible Assets
Patents	50,000	30,000

Additional Information:
i Tax paid during the year amounted to 16,000.
ii machine with a net book value of 10,000 Accumulated Depreciation Rs 40,000 was sold for 2,000.
Prepare Cash Flow Statement..

The solution of Question 53 Chapter 4 of +2-B: –

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	2,50,000
Less: Opening Balance of Profit & Loss	1,10,000
Provision for Tax	23,000	1,63,000
Net Profit before tax and extraordinary items		1,63,000
Items to be Added:
Depreciation on Machinery	90,000
Loss on Sale of Fixed Assets	8,000	98,000
Operating Profit before Working Capital Adjustments		2,61,000
Less: Increase in Current Assets
Trade Receivables	3,000
Less: Decrease in Current Liabilities
Trade Payables	68,000
Add: Decrease in Current Assets
Inventories	22,000	49,000
Cash Generated from Operations		2,12,000
Less: Tax Paid (WN 3)		16,000
Net Cash Flow from Operating Activities		1,96,000
II. Cash Flow from Financing Activities
Sale of Fixed Assets	2,000
Purchase of Patents	20,000
Purchase of Fixed Assets	3,50,000	3,68,000
Net Cash Used in Investing Activities		3,68,000
III: Cash Flow from Financing Activities
Proceeds from Issue of Equity Shares	1,00,000
Proceeds from Long term Borrowings	75,000
Raise of Bank Overdraft	2,000	1,77,000
Net Cash Flow from Financing Activities		1,77,000
IV. Net Decrease in Cash and Cash Equivalents		5,000
Add: Cash and Cash Equivalents in the beginning of the period		17,000
Cash and Cash Equivalents at the end of the period		22,000

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Fixed Assets Account
Particulars	Rs	Particular	Rs
To Balance b/d	17,00,000	By Depreciation A/c	2,000
To Bank A/c (Purchases – Bal. Fig.)	3,50,000	By Bank (Sales)	40,000
		By Loss on Sale (Profit and Loss A/c)	8,000
		By Balance c/d	20,00,000
	20,50,000		20,50,000

Accumulated Depreciation Account
Particulars	Rs	Particular	Rs
To Fixed Assets A/c	40,000	By Balance b/d	90,000
		By Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)	90,000
To Balance c/d	1,40,000
	1,80,000		1,80,000

Provision for Taxation Account
Particulars	Rs	Particular	Rs
To Bank A/c (Tax Paid- Bal. Fig.)	16,000	By Balance b/d	11,000
		By Profit and Loss A/c	23,000
To Balance c/d	18,000
	34,000		34,000