Question 64 Chapter 5 of +2-B

Question 64 Chapter 5 of +2-B


64. (CFS from Operating, Investing & Financing Activities) From the following information prepare Cash flow statement.

ParticularsNote No.31st March,201831st March,2017
I. Equity and Liabilities   
 Shareholders Fund :    
Share Capital 4,00,0003,00,000
Reserves and Surplus   
Balance in Statement of Profit and Loss 1,50,0001,10,000
Preliminary expenses -10,000-12,000
Non-Current Liabilities    
Long-term Borrowings :   
8% Debentures 1,00,0001,50,000
Current Liabilities    
Trade Payable 70,00090,000
Provision for Taxation 80,00080,000
Total  7,90,0007,18,000
II. Assets    
 Non-Current Assets :   
Tangible Assets   
Machinery 4,30,0002,98,000
Investments 60,0001,00,000
Intangible Assets   
Goodwill 90,0001,00,000
Current Assets :    
Inventories 80,00050,000
Trade Receivable  1,10,0001,60,000
Cash at Bank 20,00010,000
Total   7,90,0007,18,000

During the year (i) investment were sold at a profit of ₹ 10,000 (ii) Debenture were redeemed on 31st March, 2018 at 10% premium (iii) ₹ 75,000 was paid as income – tax (iv) Depreciation charged amounted to ₹ 70,000.

The solution of Question 64 Chapter 5 of +2-B: – 

Cash Flow Statement for the year ended 31st March 2016
(A) Cash Flow from Operating Activities  
Net Profit before Tax and Extraordinary Items* 40,000
Add: Provision for Taxation75,000 
Adjustment of non-Cash & Non-Operating Items  
Add: Preliminary expenses30,000 
Interest on Debentures42,000 
Premium on redemption of debentures20,000 
Less: Profit on Sale of Investments10,00025,000
Cash operating Profit before Working Capital adj. 83,000
Add: Decrease in current assets:  
Trade Receivables50,000 
Less: Increase in current Assets:  
Less: Decrease in Current Liabilities  
Trade Payables30,000 
Less: Income Tax Paid 75,000
Cash used in Operating Activities 1,29,000
(B) Cash flows from Investing Activities  
Inflow of Cash  
Sale of Investment50,000 
Outflow of Cash  
Purchase of Machinery2,02,000 
Net cash used in investing Activities 1,52,000
(C) Cash flows from Financing Activities  
Inflow of Cash  
Issue of Share Capital1,00,000 
Outflow of Cash  
Redemption of Debentures at 10% Premium55,000 
Interest on debentures12,00033,000
Net cash flow from financing activities 33,000
Net Increase in Cash & Cash Equivalents (A + B + C) 10,000
Add: Cash & Cash equivalents in the beginning 10,000
Cash & Cash equivalents at the end 20,000


Machinery Account
Amount ₹
Amount ₹
To Balance b/d2,98,000By Depreciation70,000
To Bank –Purchase (Bal. fig.)2,02,000By Balance c/d4,30,000
 5,00,000 5,00,000
Machinery Account
Amount ₹
Amount ₹
To Balance b/d1,00,000By Bank – Sale (Bal. fig.)50,000
To Statement of Profit & Loss
– Profit on sale
10,000By Balance c/d60,000
 1,10,000 1,10,000


Provision for Depreciation Account
Amount ₹
Amount ₹
To Machinery A/c75,000By Balance b/d80,000
To Balance c/d80,000  
  By Profit & Loss A/c – (Bal. fig.)75,000
 1,55,000 1,55,00


Provision for Taxation Account
Amount ₹
Amount ₹
To Bank – Payment35,000By Balance b/d40,000
To Balance c/d50,000  
  By Profit & Loss45,000
 85,000 85,000

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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

2 Book 3 min 225x300 - Question 64 Chapter 5 of +2-B  - USHA Publication 12 Class
T.S. Grewal’s Analysis of Financial Statement

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