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


Question 65 Chapter 5 of +2-B


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

ParticularsNote No.31st March,201831st March,2017
I. Equity and Liabilities   
 Shareholders Fund :    
Share Capital 10,00,0008,00,000
Reserves and Surplus   
Reserve 2,00,0001,50,000
Balance in Statement of Profit and Loss 1,00,00060,000
Non-Current Liabilities    
Long-term Borrowings :   
10% Debentures 2,00,000
Current Liabilities   
Trade Payable 9,00,0009,20,000
Provision for Taxation 1,00,00070,000
Total  25,00,00020,00,000
II. Assets    
 Non-Current Assets :   
Tangible Assets   
Land & Building 6,00,0004,00,000
Plant & Machinery 7,00,0005,00,000
Investments 1,00,000
Current Assets :   
Inventories 4,00,0002,00,000
Trade Receivable  5,00,0007,00,000
Cash in hand/ Bank 2,00,0002,00,000
Total   25,00,00020,00,000

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
(A) Cash Flow from Operating Activities  
Net Profit as per Balance sheet 40,000
Add: Provision for Taxation80,000 
Adjustment of non-Cash & Non-Operating Items  
Add: Transfer to reserve50,000 
Proposed Dividend1,00,000 
Less: Profit on Sale of Machine15,0003,40,000
Cash operating Profit before Working Capital adj. 3,80,000
Add: Decrease in current assets:  
Trade Receivables2,00,000 
Less : Increase in current Assets:  
Less: Decrease in Current Liabilities  
Trade Payables1,20,0001,20,000
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 & Machinery35,000 
Outflow of Cash  
Purchase of Plant & Machinery3,45,000 
Purchase of Land & Building2,00,000 
Purchase of Investment1,00,0006,10,000
Net cash used in investing Activities 6,10,000
(C) Cash flows from Financing Activities  
Inflow of Cash  
Issue of Share Capital2,00,000 
Issue of Debentures2,00,000 
Outflow of Cash  
Dividend Paid1,00,0003,00,000
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


Plant & Machinery  Account
Amount ₹
Amount ₹
To Balance b/d5,00,000By Depreciation1,25,000
To Statement of Profit & Loss15,000By Cash – Sale35,000
To Bank –Purchase (Bal. fig.)3,45,000By Balance c/d7,00,000
 8,60,000 8,60,000



Provision for Depreciation Account
Amount ₹
Amount ₹
To Bank – Payment of Tax50,000By Balance b/d70,000
To Balance c/d1,00,000  
  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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