Question 57 Chapter 5 of +2-B – T.S. Grewal 12 Class

Question 57 Chapter 5 of +2-B

Question 57 Chapter 5 of +2-B

57. From the following Balance Sheet and information of Volvo 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 2,25,000 2,50,000
(b) Reserves and Surplus 2 1,27,500 50,000
2. Non-Current Liabilities      
Long-term Borrowings : 10% Debentures   1,00,000 50,000
3. Current Liabilities      
(a) Trade Payables   72,500 35,000
(b) Other Current Liabilities−Premium on Redemption of Preference Shares   2,500 5,000
Total   5,27,500 3,90,000
II. ASSETS      
1. Non-Current Assets      
(a) Fixed Assets – Tangible    3,10,000 2,55,000
(b) 10% Investments   45,000 15,000
2. Current Assets      
(a) Current Investments   5,000 4,000
(b) Inventories   45,000 50,000
(c) Trade Receivables 3 92,500 45,000
(d) Cash and Cash Equivalents 4 35,000 21,000
Total   5,27,500 3,90,000

Notes to Accounts

Particulars 31st March, 2019 ( Rs) 31st March, 2018 ( Rs)
1. 1. Share Capital    
Equity Share Capital 1,75,000 1,50,000
10% Preference Share Capital 50,000 1,00,000
  2,25,000 2,50,000
2. Reserves and Surplus    
General Reserve  10,000 15,000
Surplus i.e., Balance in Statement of Profit and Loss 1,17,500 35,000
  1,27,500 50,000
3. Trade Receivables     
Sundry Debtors  1,00,000 50,000
Less: Provision for Doubtful Debts 7,500 5,000
  92,500 45,000
4. Cash and Cash Equivalents    
Cash in Hand 12,500 6,000
Cash in Bank 22,500 15,000
  35,000 21,000

Additional Information :
(i) You are informed during the year:

Proposed Dividend 31st March, 31st March,
  2019 Rs 2018 Rs
Equity Share Capital  Nil Nil
Preference Share Capital  12% 12%

(ii) A machine with a book value of Rs 20,000 was sold for Rs 12,500;
(iii) Depreciation charged during the year was Rs 35,000;
(iv) Preference shares were redeemed on 31st March, 2018 at a premium of 5%;
(v) An Interim dividend of Rs 5,000 was paid on equity shares on 31st March, 2019 out of General
Reserve;
(vi) Fresh equity shares were Issued on 31st March, 2019; and
(vii) Additional Investments were purchased on 31st March, 2019.

 

The solution of Question 57 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 1,17,500  
Less: Opening Balance of Profit & Loss 35,000  
Provision for Tax 12,000 94,500
Net Profit before tax and extraordinary items   94,500
Items to be Added:    
Depreciation on Fixed Assets 35,000  
Loss on Fixed Assets 7,500  
Interest on Debentures 5,000  
Provision for Doubtful Debts 2,500  
Items to be Deducted:    
Interest on Investment 1,500 48,500
Operating Profit before Working Capital Adjustments   1,43,000
Less: Increase in Current Assets    
Trade Payables 50,000  
Add: Decrease in Current Assets    
Inventory 5,000  
Add: Increase in Current Liabilities    
Trade Payables 37,500 7,500
Cash Generated from Operations   1,35,500
Less: Tax Paid (WN 3)  
Net Cash Flow from Operating Activities   1,35,500
II. Cash Flow from Financing Activities    
Sale of Fixed Assets 12,500  
Purchase of Fixed Assets (WN) 1,10,000  
Purchase of Investment 25,000  
Interest on Investment 1,500 1,21,000
Net Cash Used in Investing Activities   1,21,000
III: Cash Flow from Financing Activities    
Proceeds from Issue of Equity Shares 25,000  
Proceeds from Issue of issue of Debentures 50,000  
Interest on Debentures Paid 5,000  
Redemption of Preference Share Capital 50,000  
Security Premium Reserve 2,500  
Dividend Paid on Preference Share Capital 12,000  
Dividend Paid on Equity Share Capital 5,000 500
Net Cash Flow from Financing Activities   500
IV. Net Decrease in Cash and Cash Equivalents
  15,000
Add: Cash and Cash Equivalents in the beginning of the period
  25,000
Cash and Cash Equivalents at the end of the period
  40,000

 

Fixed Assets Account
Particulars
Rs Particular Rs
To Balance b/d 2,55,000 By Bank A/c (Sale) 12,500
To Bank A/c (Purchases – Bal. Fig.) 1,10,000 By Depreciation A/c 35,000
    By Loss on Sale (Profit and Loss A/c) 7,500
    By Balance c/d 3,10,000
  3,65,000   3,65,000

 

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 57 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.