Question 60 Chapter 5 of +2-B
Table of Contents
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 | |
| 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 | ||
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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)
- 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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
