Question 53 Chapter 5 of +2-B - USHA Publication 12 Class

Question 53 Chapter 5 of +2-B

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The solution of Question 53 Chapter 5 of +2-B: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

53. (CFS Showing Operating, Investing & Financing Activities) Prepare cash flow statement from the following balance sheet as on March 31, 2018:

Particulars	Note No.	31st March,2018	31st March,2017
I. Equity and Liabilities
Shareholders Fund :
Share Capital		6,00,000	5,00,000
Reserves and Surplus
General Reserve		25,000	10,000
Balance in Statement of Profit and Loss		1,20,000	80,000
2. Non-current Liabilities
Long-term Borrowings
10% Debentures		30,000	80,000
Current Liabilities
Trade Payable		25,000	30,000
Total		8,00,000	7,00,000
II. Assets
1. Non-Current Assets :
Tangible Assets :
Land and Buildings		3,50,000	2,75,000
Machinery		3,45,000	2,90,000
Intangible Assets
Goodwill		5,000	25,000
2. Current Assets
Inventories		45,000	85,000
Trade Receivables		25,000	10,000
Cash		30,000	15,000
Total		8,00,000	7,00,000

Adjustment :
Depreciation provided on machinery during the year 12,000.
New shares were issued on 31st March 2018
10% Debentures were redeemed on 31st March 2018.

The solution of Question 53 Chapter 5 of +2-B: –

Cash Flow Statement
Particulars		Rs
(A) Cash Flow from Operating Activities
Net Profit as per the statement		40,000
Adjustments of Non-cash or Non-Operating Items :
Add: General reserve	15,000
Goodwill wrote off	20,000
Depreciation on Machinery	12,000
Interest on Debentures	8,000	55,000
Cash operating Profit before Working Capital adj.		95,000
Add: Decrease in current Assets:
Inventories	40,000
Less: Decrease in Current Liabilities:
Trade Payable	5,000
Less: Increase in current Assets:
Trade Receivable	15,000	20,000
Cash flow from Operating Activities		1,15,000
(B) Cash flows from Investing Activities
Outflow of Cash
Purchase of Land & Building	75,000
Purchase of Machinery	67,000	1,42,000
Net cash used in investing Activities		1,42,000
(C) Cash flows from Financing Activities
Inflow of Cash
Issue of Equity Shares	1,00,000
Outflow of Cash
Redemption of Debentures	50,000
Interest Paid on Debentures	8,000	42,000
Net cash flow from financing activities		42,000
Net decrease in cash & Cash equivalents (A + B + C)		15,000
Add: Cash equivalent at the beginning of the year		15,000
Cash equivalent at the end of year		30,000

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Working Note

Fixed Assets Account
Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	2,90,000	By Depreciation	12,000
To Bank –Purchase (Bal. fig.)	67,000	By Balance c/d	3,45,000
	3,57,000		3,57,000