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Question 56 Chapter 8 -Unimax Publication Class 12 Part 2 – 2021

Question 56 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021
Question 56 Chapter 8 -Unimax Publication Class 12 Part 2 - 2021

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Question 56 Chapter 8 -Unimax

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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 3,42,0004,50,000
8% redeemable   
Preference shares 1,50,0001,00,000
General reserves 40,00070,000
Profit and loss a/c 30,00048,000
Creditors 55,00083,000
Bills payable 20,00016,000
Provision for taxation 40,00050,000
  6,77,0008,17,000
Assets   
Goodwill 1,15,00090,000
Land and buildings 2,00,0001,70,000
Plant 80,0002,00,000
Debtors 1,60,0002,00,000
Stock 77,0001,09,000
Bills receivable 20,00030,000
Cash in hand 15,00010,000
Cash at bank 10,0008,000
TOTAL 6,77,0008,17,000

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

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(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 45,0001,57,000
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    

 55,00055,000
Operating before working capital change  2,30,000
Add: increase in current liabilities   
Creditors 28,00028,000
   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

 

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