Question 56 Chapter 8 -Unimax
56. From the following information of the balance sheets of Harshit Ltd. and the additional information given, make out a cash flow statement:
| Particulars | ₹ | ₹ | |
| Equity & liabilities | |||
| Equity share capital | 3,42,000 | 4,50,000 | |
| 8% redeemable | |||
| Preference shares | 1,50,000 | 1,00,000 | |
| General reserves | 40,000 | 70,000 | |
| Profit and loss a/c | 30,000 | 48,000 | |
| Creditors | 55,000 | 83,000 | |
| Bills payable | 20,000 | 16,000 | |
| Provision for taxation | 40,000 | 50,000 | |
| 6,77,000 | 8,17,000 | ||
| Assets | |||
| Goodwill | 1,15,000 | 90,000 | |
| Land and buildings | 2,00,000 | 1,70,000 | |
| Plant | 80,000 | 2,00,000 | |
| Debtors | 1,60,000 | 2,00,000 | |
| Stock | 77,000 | 1,09,000 | |
| Bills receivable | 20,000 | 30,000 | |
| Cash in hand | 15,000 | 10,000 | |
| Cash at bank | 10,000 | 8,000 | |
| TOTAL | 6,77,000 | 8,17,000 | |
Additional information:
(I) Depreciation of 10,000 and 20,000 have been charged on the plant account and land and building account respectively in 2021-22
(ii) an interim dividend of 20,000 has been paid in 2021-2022,
(iii) income tax of 35,000 was paid during the year 2021-2022.
Proposed dividend 2021—50,000; 2022-60,000.
The solution of Question 56 Chapter 8 – Unimax Publication Class 12 Part 2-2021: –
| (A) cash flow from operating activities | |||
| Net profit as per statement | 18,000 | ||
| Add: transfer to general reserve | 30,000 | ||
| Dividend on pref. Share | 12,000 | ||
| Proposed dividend | 50,000 | ||
| Interim dividend | 20,000 | ||
| Provision for taxation | 45,000 | 1,57,000 | |
| Profit before tax | 1,75,000 | ||
| Add: non-cash and non-operating items | |||
| Depreciation on plant 10,000 | |||
| Depreciation on land and building 20,000 | |||
|
25,000 |
55,000 | 55,000 | |
| Operating before working capital change | 2,30,000 | ||
| Add: increase in current liabilities | |||
| Creditors | 28,000 | 28,000 | |
| 2,58,000 | |||
| Less: increase in current assets | |||
| Debtors (40,000) | |||
| Stock (32,000) | |||
| Bills receivable (10,000) | |||
| Decrease in current liabilities | |||
| Bills payable (4000) | (86,000) | ||
| Cash from operating activities | 1,72,000 | ||
| Less: income tax paid | (35,000) | ||
| Cash from operating activities | 1,37,000 | ||
| (B) cash flow from investing activities | |||
| Sale of land and building | 10,000 | ||
| Purchase of plant | (1,30,000) | ||
| Cash flow from investing activities | (1,20,000) | ||
| Cash flow from financing activities | |||
| Proposed dividend paid | (50,000) | ||
| Issue of equity share capital | 1,08,000 | ||
| Redemption of preference share | (50,000) | ||
| Interim dividend paid | (20,000) | ||
| Dividend on pref. Share | (12,000) | ||
| Cash flow from financing activities | (24,000) | ||
| Net decrease in cash and cash equivalents | (7,000) | ||
| Opening balance of cash and bank (15,000+10,000) | 25,000 | ||
| Closing balance of cash and bank (10,000+8,000) | 18,000 | ||