Question 60 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 60 Chapter 5 of +2-B

Table of Contents

The solution of Question 60 Chapter 4 of +2-B: –

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)

60. From the following Balance Sheet as at 31st March, 2019 and Statement of Profit and Loss for the year ended 31st March, 2019 of RSB Ltd. and additional information, prepare Cash Flow Statement:

Particulars	Note No.	31st March, 2019 Rs	31st March,2018 Rs
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital		6,00,000	5,00,000
(b) Reserves and Surplus	1	3,00,000	1,20,000
2. Non-Current Liabilities
Long-term Borrowings (5% Debentures)		1,20,000	1,50,000
3. Current Liabilities
(a) Trade Payables		13,000	—-
(b) Other Current Liabilities	2	2,85,000	2,38,000
(c) Short-term Provisions (Provision for Tax)		44,000	30,000
Total		13,62,000	10,38,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets- Tangible	3	6,20,000	4,00,,000
(b) Non-current Investments
2. Current Assets
(a) Current Investments		34,000	20,000
(b) Inventories		3,28,000	2,63,000
(c) Trade Receivables		3,48,000	3,10,000
(d) Cash and Cash Equivalents	2	32,000	45,000
Total		13,62,000	10,38,000

STATEMENT OF PROFIT AND LOSS For the year ended 31st March,2019
				Particulars	Note No.	31st March,	31st March,
		2019 Rs	2018 Rs
I. Revenue from Operations Net Sales	4	40,00,000	35,00,000
II. Other Income	5	35,000	30,000
III. Total Revenue I + II		40,35,000	35,30,000
IV. Expenses;
Purchases of Stock-in-Trade		27,00,000	24,70,000
Change in Inventories of Stock-in-Trade	6	1,00,000	50,000
Finance Costs		27,500	20,000
Depreciation		40,000	45,000
Other Expenses		22,500	20,000
Total		28,90,000	26,05,000
III. Profit before Tax III− IV		11,45,000	9,25,000
VI. Less: Tax		3,45,000	2,25,000
V. Profit after Tax (V − VI)		8,00,000	7,00,000

Notes to Accounts

Particulars	31st March, 2019 Rs	31st March,2018 Rs
1. Reserves and Surplus
Debenture Redemption Reserve	1,00,000	1,00,000
Surplus, i.e., Balance in Statement of Profit and Loss	8,50,000	2,00,000
	9,50,000	3,00,000
2. Other Current Liabilities
Interest on Debentures	35,000	20,000
Outstanding Expenses	4,000	5,000
	39,000	25,000
3. Fixed Assets–Tangible
Cost	8,90,000	9,90,000
Less: Accumulated Depreciation	2,05,000	2,45,000
	6,85,000	7,45,000
4. Revenue from Operations
Sales	42,00,000	35,75,000
Less: Sales Return	2,00,000	75,000
	40,00,000	35,00,000
5. Other Income
Interest on Deposits	15,000	12,500
Dividend on Investments	10,000	17,500
Gain Profit on Sale of Fixed Assets	10,000	—-
	35,000	30,000
Particulars	31st March,	31st March,
	2019 Rs	2018 Rs
6. Change in Inventories of Stock-in-Trade
Opening Stock	2,00,000	2,50,000
Less: Closing Stock	1,00,000	2,00,000
	1,00,000	50,000

The solution of Question 60 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 :	8,00,000
Provision for Tax	3,45,000	11,45,000
Net Profit before tax and extraordinary items		11,45,000
Items to be Added:
Finance Cost	27,500
Depreciation and Amortisation Expenses	40,000	95,000
Items to be Deducted:
Interest on Deposits	15,000
Dividend received on Investments	10,000
Gain on sale of fixed asset	10,000	35,000
Net Profit before working capital changes		11,77,500
Add : Increase in Current Liabilities
Trade Payables	20,000
Add : Decrease in Current Assets
Inventories	1,00,000
Less: Decrease in Current Liabilities
Outstanding expenses	1,000
Add: Increase in Current Liabilities
Trade Receivable	2,50,000	10,46,500
Cash Generated from Operations		10,46,500
Less: Tax Paid (WN 3)		3,10,000
Net Cash Flow from Operating Activities		7,36,500
II. Cash Flow from Financing Activities
Sale of Fixed Asset (WN 1(b))	30,000
Purchase of Investments	5,00,000
Dividend received on Investments	10,000
Interest Received on deposits	15,000
Net Cash Used in Investing Activities		4,45,000
III: Cash Flow from Financing Activities
Proceeds from Issue of shares	2,50,000
Proceeds from Issue of debentures	5,00,000
Redemption of debentures (WN 2)	2,00,000
Finance Cost paid	12,500
Interim Dividend paid	1,00,000
Proposed Dividend Paid	50,000	3,87,500
Net Cash Flow from Financing Activities		3,87,500
IV. Net Decrease in Cash and Cash Equivalents		6,79,000
Add: Cash and Cash Equivalents in the beginning of the period		1,95,000
Cash and Cash Equivalents at the end of the period		8,74,000

Advertisement-X

Accumulated Depreciation Account
Particulars	Rs	Particular	Rs
To Fixed Asset A/c (On Sale of machinery)	80,000	By Balance b/d	2,45,000
To Balance c/d	2,05,000	By Profit and Loss A/c	40,000
	2,85,000		2,85,000

Accumulated Depreciation Account
Particulars	Rs	Particular	Rs
To Balance b/d	9,90,000	By Accumulated Depreciation A/c	80,000
To Statement of Profit & Loss A/c	10,000	By Bank A/c (Sale of Machine) (Bal. Fig.)	30,000
		By Balance c/d	8,90,000
	10,00,000		10,00,000

5% Debentures Account
Particulars	Rs	Particular	Rs
To Bank A/c (Redemption Bal. Fig.)	2,00,000	By Balance b/d	2,45,000
To Balance c/d	2,05,000	By Bank A/c (Issue of Debentures)	40,000
	2,85,000		2,85,000

Provision for Tax Account
Particulars	Rs	Particular	Rs
To Bank A/c- Tax Paid	3,10,000	By Balance b/d	2,25,000
To Balance c/d	2,60,000	By Profit and Loss A/c	3,45,000
	5,70,000		5,70,000