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Question 55 Chapter 8 -Unimax
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Table of Contents
55. From the following particulars of Bharat Ltd., prepare a cash flow statement:
| Particulars | ₹ | ₹ | |
| Equity & liabilities | |||
| Shareholders’ funds | |||
| Equity share capital | 7,20,000 | 9,50,000 | |
| 18% pref. Share capital | 4,00,000 | 2,00,000 | |
| Reserve & surplus | |||
| Profit and loss a/c | 1,00,000 | 4,00,000 | |
| Reserves | 1,20,000 | 1,40,000 | |
| Non-current liabilities | |||
| 14% debentures | 2,00,000 | 3,00,000 | |
| Current liabilities | |||
| Creditors | 40,000 | 1,50,000 | |
| Bank Overdraft | 60,000 | 50,000 | |
| Provision for tax | 20,000 | 40,000 | |
| Provision for doubtful debts | 20,000 | 30,000 | |
| Total | 16,80,000 | 22,60,000 | |
| Assets | |||
| Non-current assets | |||
| Fixed assets | 10,20,000 | 12,40,000 | |
| Non-current investment | |||
| 10% investments (long-term) | 60,000 | 1,60,000 | |
| Current assets | |||
| Debtors | 80,000 | 1,50,000 | |
| Stock | 3,80,000 | 3,70,000 | |
| Cash | 1,20,000 | 3,30,000 | |
| Other current assets | |||
| Underwriting commission | 5,000 | 6000 | |
| Discount on issue | |||
| Debentures | 15,000 | 4000 | |
| Total | 16,80,000 | 22,60,000 | |
You are informed that during the year:
Proposed dividend 2021 1,20,000; 2022 1,50,000.
(a) A machine costing 1,40,000 (depreciation provided thereon 60,000) was sold for 50,000, depreciation charged during the year was 1,40,000.
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(b) An interim dividend @ 15% was paid on equity shares. A new share was issued on 31.12.2022.
(c) Tax paid during the year was 10,000.
(d) On 31.12.2022 some investments were purchased for 1,80,000 and some, investments were sold at a profit of 20% on sale.
(e) Preference shares were redeemed on 31.12.2022 at a premium of 5%
The solution of Question 55 Chapter 8 – Unimax Publication Class 12 Part 2-2021: –
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DEC,2022
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| Particulars | ₹ | ₹ | |
| Cash from operating activities: | |||
| Net profit as per balance sheet | 3,00,000 | ||
| Add: non-cash, non-operating expenses: | |||
| Discount on issue of debentures w/o | 11,000 | ||
| Depreciation charged | 1,40,000 | ||
| Loss on sale of machinery | 30,000 | ||
| Interim dividend paid | 1,08,000 | ||
| Provision for taxation | 30,000 | ||
| Premium paid on redemption of pref. shares | 10,000 | ||
| Preference share dividend paid | 72,000 | ||
| Transfer to reserve | 20,000 | ||
| Interest on debentures | 28,000 | ||
| Proposed dividend | 1,20,000 | 5,69,000 | |
| Less: non-cash, non-operating incomes: | |||
| Interest received on investment | (6,000) | ||
| Profit on sale of investment | (16,000) | (22,000) | |
| Add: decrease in current assets & increase in current liability: | |||
| Decrease in stock | 10,000 | ||
| Increase in creditors | 1,10,000 | ||
| Increase in provision for doubtful debts | 10,000 | ||
| Decrease in current liabilities & | |||
| Increase in current assets: | |||
| Increase in debtors | (70,000) | 60,000 | |
| Less: income paid tax | (10,000) | (10,000) | |
| Cash flow from operating activities | 8,97,000 | ||
| Cash from investing activities: | |||
| Purchase of investment | (1,80,000) | ||
| Purchase of machinery | (4,40,000) | ||
| Sale of machinery | 50,000 | ||
| Sale of investment | 96,000 | ||
| Interest received from investment | 6,000 | ||
| Cash flow from investing activities | (4,68,000) | ||
| Cash from financing activities: | |||
| Issue of equity share capital | 2,30,000 | ||
| Redemption of pref. share capital (2,00,000+10,000) | (2,10,000) | ||
| Issue of debenture | (99,000) | ||
| Underwriting commission | (1,08,000) | ||
| Interim dividend paid | (72,000) | ||
| Bank Overdraft | (10,000) | ||
| Interest on debentures | (28,000) | ||
| Proposed dividend paid | (1,20,000) | ||
| Cash flow from financial activity | (2,19,000) | ||
| Net increase | 2,20,000 | ||
| Add: opening cash & bank overdraft (1,20,000) | 60,000 | ||
| Closing cash & bank overdraft (3,30,000) | 2,80,000 | ||
Working Notes:
MACHINERY A/C
| Particulars | ₹ | Particulars | ₹ |
| To Balance b/d | 10,20,000 | By Cash a/c (sale) | 50,000 |
| To Cash a/c (purchased) (B/F) | 4,40,000 | By Profit & loss a/c (loss) | 30,000 |
| By Profit & loss a/c (Depreciation charged) | 1,40,000 | ||
| By Balance c/d | 12,40,000 | ||
| 14,60,000 | 14,60,000 |
Provision for taxation A/C
| Particulars | ₹ | Particulars | ₹ |
| To Cash a/c (tax paid) | 10,000 | By Balance b/d | 20,000 |
| To Balance c/d | 40,000 | By Profit & loss a/c (B/F) | 30,000 |
| (New provision) | |||
| 50,000 | 50,000 |
Investment A/c
| Particulars | ₹ | Particulars | ₹ |
| To Balance b/d | 60,000 | By Cash a/c (sale) | 96,000 |
| To Profit & loss a/C | 16,000 | By Balance c/d | 1,60,000 |
| To Purchase | 1,80,000 | ||
| 2,56,000 | 2,56,000 |
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What is the cash flow statement? why do we need to prepare?
Unimax Publication – Accountancy PSEB Class 12 – Volume I – Solution
- Chapter No. 1 – Accounting Not-for-Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit sharing ratio among Existing Partners )
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Unimax Publication – Accountancy PSEB (Class 12) – Part – II – Solution
- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Company Accounts (Issue of Debentures)
- Chapter No. 3 – Company Accounts (Redemption of Debentures)
- Chapter No. 4 – Financial Statements of a Company
- Chapter No. 5 – Financial Statement Analysis
- Chapter No. 6 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 7 – Ratio Analysis
- Chapter No. 8 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2023@ Official Website of Sultan Chand Publication
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