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Question 65 Chapter 5 of +2-B – USHA Publication 12 Class

Question 65 Chapter 5 of +2-B
Q-65- CH-5 Book 2 - Usha Publisher +2 Book 2019 - Solution

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Question 65 Chapter 5 of +2-B

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65. (CFS Showing Operating, Investing & Financing Activities) From the following details relating to the accounts of Grow More Ltd., prepare Cash flow statement.

BALANCE SHEETS 
Particulars Note No. 31st March,2018 31st March,2017
I. Equity and Liabilities      
 Shareholders Fund :       
Share Capital   10,00,000 8,00,000
Reserves and Surplus      
Reserve   2,00,000 1,50,000
Balance in Statement of Profit and Loss   1,00,000 60,000
Non-Current Liabilities       
Long-term Borrowings :      
10% Debentures   2,00,000
Current Liabilities      
Trade Payable   9,00,000 9,20,000
Provision      
Provision for Taxation   1,00,000 70,000
Total    25,00,000 20,00,000
II. Assets       
 Non-Current Assets :      
Tangible Assets      
Land & Building   6,00,000 4,00,000
Plant & Machinery   7,00,000 5,00,000
Investments   1,00,000
Current Assets :      
Inventories   4,00,000 2,00,000
Trade Receivable    5,00,000 7,00,000
Cash in hand/ Bank   2,00,000 2,00,000
Total     25,00,000 20,00,000

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Additional Information :
Depreciation @ 25% was charged on the opening value of the Plant and Machinery.
During the year one old machine costing ₹ 50,000(WDV ₹ 20,000) was sold for ₹ 35,000.
₹ 50,000 was paid towards Income tax during the year
10% Debentures were issued on 31st March 2018
Building under construction was not subject to any depreciation.
Proposed Dividend 31–3–2018 31–3–2017
2,00,000 1,00,000
Prepare Cash Flow Statement by indirect method.

The solution of Question 65 Chapter 5 of +2-B: – 

Cash Flow Statement for the year ended 31st March 2016
Particulars
Rs
(A) Cash Flow from Operating Activities    
Net Profit as per Balance sheet   40,000
Add: Provision for Taxation 80,000  
Adjustment of non-Cash & Non-Operating Items    
Add: Transfer to reserve 50,000  
Proposed Dividend 1,00,000  
Depreciation 1,25,000  
Less: Profit on Sale of Machine 15,000 3,40,000
Cash operating Profit before Working Capital adj.   3,80,000
Add: Decrease in current assets:    
Trade Receivables 2,00,000  
Less : Increase in current Assets:    
Inventories 2,00,000  
Less: Decrease in Current Liabilities    
Trade Payables 1,20,000 1,20,000
Less: Income Tax Paid   50,000
Cash flow from Operating Activities   3,10,000
(B) Cash flows from Investing Activities    
Inflow of Cash    
Sale of Plant & Machinery 35,000  
Outflow of Cash    
Purchase of Plant & Machinery 3,45,000  
Purchase of Land & Building 2,00,000  
Purchase of Investment 1,00,000 6,10,000
Net cash used in investing Activities   6,10,000
(C) Cash flows from Financing Activities    
Inflow of Cash    
Issue of Share Capital 2,00,000  
Issue of Debentures 2,00,000  
Outflow of Cash    
Dividend Paid 1,00,000 3,00,000
Net cash flow from financing activities   3,00,000
Net Increase in Cash & Cash Equivalents (A + B + C)   Nil
Add: Cash & Cash equivalents in the beginning   2,00,000
Cash & Cash equivalents at the end   2,00.000

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Plant & Machinery  Account
Particulars
Amount ₹
Particulars
Amount ₹
To Balance b/d 5,00,000 By Depreciation 1,25,000
To Statement of Profit & Loss 15,000 By Cash – Sale 35,000
To Bank –Purchase (Bal. fig.) 3,45,000 By Balance c/d 7,00,000
  8,60,000   8,60,000

 

Provision for Depreciation Account
Particulars
Amount ₹
Particulars
Amount ₹
To Bank – Payment of Tax 50,000 By Balance b/d 70,000
To Balance c/d 1,00,000    
    By Profit & Loss A/c – (Bal. fig.) 80,000
  1,50,000   1,50,000

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

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

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