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

Question 57 Chapter 5 of +2-B
Question No.57 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution


Question 57 Chapter 5 of +2-B


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

ParticularsNote No. 31st March, 31st March,
  2019 Rs 2018 Rs 
1. Shareholders’ Funds    
(a) Share Capital12,25,0002,50,000
(b) Reserves and Surplus21,27,50050,000
2. Non-Current Liabilities   
Long-term Borrowings : 10% Debentures 1,00,00050,000
3. Current Liabilities   
(a) Trade Payables 72,50035,000
(b) Other Current Liabilities−Premium on Redemption of Preference Shares 2,5005,000
Total 5,27,5003,90,000
1. Non-Current Assets   
(a) Fixed Assets – Tangible  3,10,0002,55,000
(b) 10% Investments 45,00015,000
2. Current Assets   
(a) Current Investments 5,0004,000
(b) Inventories 45,00050,000
(c) Trade Receivables392,50045,000
(d) Cash and Cash Equivalents435,00021,000
Total 5,27,5003,90,000

Notes to Accounts

Particulars31st March, 2019 ( Rs)31st March, 2018 ( Rs)
1. 1. Share Capital  
Equity Share Capital1,75,0001,50,000
10% Preference Share Capital50,0001,00,000
2. Reserves and Surplus  
General Reserve 10,00015,000
Surplus i.e., Balance in Statement of Profit and Loss1,17,50035,000
3. Trade Receivables   
Sundry Debtors 1,00,00050,000
Less: Provision for Doubtful Debts7,5005,000
4. Cash and Cash Equivalents  
Cash in Hand12,5006,000
Cash in Bank22,50015,000

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

Proposed Dividend31st March,31st March,
 2019 Rs2018 Rs
Equity Share Capital NilNil
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
(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
I. Cash Flow from Financing Activities  
Profit as per Statement of Profit and Loss :  
Closing Balance of Profit & Loss1,17,500 
Less: Opening Balance of Profit & Loss35,000 
Provision for Tax12,00094,500
Net Profit before tax and extraordinary items 94,500
Items to be Added:  
Depreciation on Fixed Assets35,000 
Loss on Fixed Assets7,500 
Interest on Debentures5,000 
Provision for Doubtful Debts2,500 
Items to be Deducted:  
Interest on Investment1,50048,500
Operating Profit before Working Capital Adjustments 1,43,000
Less: Increase in Current Assets  
Trade Payables50,000 
Add: Decrease in Current Assets  
Add: Increase in Current Liabilities  
Trade Payables37,5007,500
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 Assets12,500 
Purchase of Fixed Assets (WN)1,10,000 
Purchase of Investment25,000 
Interest on Investment1,5001,21,000
Net Cash Used in Investing Activities 1,21,000
III: Cash Flow from Financing Activities  
Proceeds from Issue of Equity Shares25,000 
Proceeds from Issue of issue of Debentures50,000 
Interest on Debentures Paid5,000 
Redemption of Preference Share Capital50,000 
Security Premium Reserve2,500 
Dividend Paid on Preference Share Capital12,000 
Dividend Paid on Equity Share Capital5,000500
Net Cash Flow from Financing Activities 500
IV. Net Decrease in Cash and Cash Equivalents
Add: Cash and Cash Equivalents in the beginning of the period
Cash and Cash Equivalents at the end of the period


Fixed Assets Account
To Balance b/d2,55,000By Bank A/c (Sale)12,500
To Bank A/c (Purchases – Bal. Fig.)1,10,000By Depreciation A/c35,000
  By Loss on Sale (Profit and Loss A/c)7,500
  By Balance c/d3,10,000
 3,65,000 3,65,000


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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)

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)

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


Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements


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