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Question 55 Chapter 8 – Unimax Publication Class 12 Part 2 – 2021

Question 55 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021
Question 55 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021

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Question 55 Chapter 8 -Unimax

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55. From the following particulars of Bharat Ltd., prepare a cash flow statement:

Particulars
Equity & liabilities   
Shareholders’ funds   
Equity share capital 7,20,0009,50,000
18% pref. Share capital 4,00,0002,00,000
Reserve & surplus   
Profit and loss a/c 1,00,0004,00,000
Reserves 1,20,0001,40,000
Non-current liabilities   
14% debentures 2,00,0003,00,000
Current liabilities   
Creditors 40,0001,50,000
Bank Overdraft 60,00050,000
Provision for tax 20,00040,000
Provision for doubtful debts 20,00030,000
Total 16,80,00022,60,000
Assets   
Non-current assets   
Fixed assets 10,20,00012,40,000
Non-current investment   
10% investments
(long-term)
 60,0001,60,000
Current assets   
Debtors  80,0001,50,000
Stock  3,80,0003,70,000
Cash 1,20,0003,30,000
Other current assets   
Underwriting commission 5,0006000
Discount on issue   
Debentures 15,0004000
Total 16,80,00022,60,000

You are informed that during the year:

Proposed dividend 2021 1,20,000; 2022 1,50,000.

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(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.

(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

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FOR THE YEAR ENDED 31st DEC,2022

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 1,20,0005,69,000
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/d10,20,000By Cash a/c (sale)50,000
To Cash a/c (purchased) (B/F)4,40,000By Profit & loss a/c (loss)30,000
  By Profit & loss a/c
(Depreciation charged)
1,40,000
  By Balance c/d12,40,000
 14,60,000 14,60,000

Provision for taxation A/C

Particulars Particulars
To Cash a/c (tax paid)10,000By Balance b/d20,000
To Balance c/d40,000By Profit & loss a/c (B/F)30,000
(New provision)   
    
 50,000 50,000

Investment A/c

Particulars Particulars
To Balance b/d60,000By Cash a/c (sale)96,000
To Profit & loss a/C16,000By Balance c/d1,60,000
To Purchase1,80,000  
    
 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

Unimax Publication – Accountancy PSEB (Class 12) – Part – II – Solution

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