Question 56 Chapter 5 of +2-B – T.S. Grewal 12 Class

Question 56 Chapter 5 of +2-B

Question 56 Chapter 5 of +2-B

56. From the following Balance Sheet and information of Sun Ltd., prepare Cash Flow Statement:

Particulars Note No.  31st March,  31st March, 
    2019 Rs 2018 Rs 
I. EQUITY AND LIABILITIES      
1. Shareholders’ Funds       
(a) Share Capital 1 7,00,000 6,00,000
(b) Reserves and Surplus 2 4,10,000 2,00,000
2. Non-Current Liabilities      
Long-term Borrowings : 10% Debentures   3,00,000 2,00,000
3. Current Liabilities      
Trade Payables   1,40,000 60,000
Total   15,50,000 10,60,000
II. ASSETS      
1. Non-Current Assets      
(a) Fixed Assets – Tangible    7,00,000 6,00,000
(b) 10% Investments   2,00,000 1,00,000
2. Current Assets      
(a) Current Investments   90,000 50,000
(b) Inventories   2,00,000 1,00,000
(c) Trade Receivables 3 2,80,000 1,90,000
(d) Cash and Cash Equivalents   80,000 20,000
Total   15,50,000 10,60,000

Notes to Accounts

Particulars 31st March, 2019 ( Rs) 31st March, 2018 ( Rs)
1. 1. Share Capital    
Equity Share Capital 5,00,000 3,00,000
10% Preference Share Capital 2,00,000 3,00,000
  7,00,000 6,00,000
2. Reserves and Surplus    
Securities Premium Reserve 10,000 —-
Surplus i.e., Balance in Statement of Profit and Loss 4,00,000 2,00,000
  4,10,000 2,00,000
3. Trade Receivables     
Sundry Debtors  3,00,000 2,00,000
Less: Provision for Doubtful Debts 20,000 10,000
  2,80,000 1,90,000

You are informed that during the year:

(i) Proposed Dividend 31st March,  31st March, 
  2019 Rs  2018 Rs
Equity Share Capita Nil Nil
Preference Share Capital 10% 10%

(ii) A machine with a book value of Rs 90,000 was sold for Rs 50,000;
(iii) Depreciation charged during the year Rs 60,000;
(iv) Debentures were issued on 1st April, 2018;
(v) Investments were purchased on 31st March, 2019;
(vi) Preference shares were redeemed on 31st December,2018;
(vii) An interim dividend @ 15% was paid on equity shares on 31st December, 2018;
(viii) Fresh equity shares were issued at a premium of 5% on 31st March, 2019.

 

The solution of Question 56 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 4,00,000  
Less: Opening Balance of Profit & Loss 2,00,000  
Provision for Tax 30,000 2,30,000
Net Profit before tax and extraordinary items   2,30,000
Items to be Added:    
Depreciation on Fixed Assets 60,000  
Loss on Fixed Assets 40,000  
Interest on Debentures 30,000  
Dividend on Equity Shares 45,000  
Provision for Doubtful Debts 10,000  
Items to be Deducted:    
Interest on Investment 10,000 1,75,000
Operating Profit before Working Capital Adjustments   4,05,000
Less: Increase in Current Assets    
Trade Payables 1,00,000  
Inventories 1,00,000 2,00,000
Add: Decrease in Current Assets    
Trade Receivables 80,000 80,000
Cash Generated from Operations   2,85,000
Less: Tax Paid (WN 3)  
Net Cash Flow from Operating Activities   2,85,000
II. Cash Flow from Financing Activities    
Sale of Fixed Assets 50,000  
Purchase of Fixed Assets (WN) 2,50,000  
Purchase of Investment 1,00,000  
Interest on Investment 10,000 2,90,000
Net Cash Used in Investing Activities   2,90,000
III: Cash Flow from Financing Activities    
Proceeds from Issue of Equity Shares 2,00,000  
Proceeds from Issue of issue of Debentures 1,00,000  
Interest on Debentures Paid 30,000  
Redemption of Preference Share Capital 1,00,000  
Security Premium Reserve 10,000  
Dividend Paid on Preference Share Capital 30,000  
Dividend Paid on Equity Share Capital 45,000 1,05,000
Net Cash Flow from Financing Activities   1,05,000
IV. Net Decrease in Cash and Cash Equivalents
  1,00,000
Add: Cash and Cash Equivalents in the beginning of the period
  70,000
Cash and Cash Equivalents at the end of the period
  1,70,000

 

Fixed Assets Account
Particulars
Rs Particular Rs
To Balance b/d 6,00,000 By Bank A/c (Sale) 50,000
To Bank A/c (Purchases – Bal. Fig.) 2,50,000 By Depreciation A/c 60,000
    By Loss on Sale (Profit and Loss A/c) 40,000
    By Balance c/d 7,00,000
  8,50,000   8,50,000

 

Thanks, Please Like and share with your friends  

Comment if you have any question.

Also, Check out the solved question of previous Chapters: –

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

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

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

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

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 56 Chapter 5 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.