Question 50 Chapter 15 of Class 12 Part – 2 – 2024
PREPARING OF CASH FLOW STATEMENT (WITH ADJUSTMENT)
50. (CFS Showing Operating, Investing & Financing Activities/Proposed Dividend) The balance sheets of Kewal Ltd. were as follows :
| Particulars | Note No. | 31st March 2018 | 31st March 2017 |
| I. Equity and Liabilities | |||
| Shareholders Fund : | |||
| Equity Share Capital | 10,00,000 | 7,00,000 | |
| Reserves and surplus | |||
| Balance in Statement of Profit and Loss | 3,00,000 | 1,90,000 | |
| 13,00,000 | 8,90,000 | ||
| II. Assets | |||
| Non-Current Assets : | |||
| Tangible Assets | |||
| Plant & Machinery | 8,00,000 | 5,00,000 | |
| Current Assets | |||
| Inventories | 1,00,000 | 75,000 | |
| Cash and Cash Equivalents-Cash | 4,00,000 | 3,15,000 | |
| 13,00,000 | 8,90,000 |
Additional Information:
(a) 50,000 depreciation has been charged on plant and machinery during the year 2017-18.
(b) A piece of machinery costing 12,000 (book value 5,000) was sold at 60% profit on book value.
(c) Proposed Dividend 31.3.2018 31.3.2017
50,000 40,000
Prepare Cash Flow Statement.
The solution of Question 50 Chapter 15 of Class 12 Part – 2 – 2024: –
| Cash Flow Statement |
||
| Particulars |
Rs |
|
| (A) Cash Flow from Operating Activities | ||
| Net Profit before taxation | ||
| Profit as per the statement | 1,10,000 | |
| Add: Proposed dividend | 40,000 | 1,50,000 |
| Adjustments of Non-cash or Non-Operating Items : | ||
| Add: Depreciation on Plant and Machinery | 50,000 | |
| Less: Non-Operating Income | ||
| Profit on Sale of Machinery | 3,000 | 47,000 |
| Cash operating Profit before Working Capital adj. | 1,97,000 | |
| Less: Increase in current Assets: | ||
| Inventories | 25,000 | 25,000 |
| Cash used in Operating Activities | 1,72,000 |
|
| (B) Cash flows from Investing Activities | ||
| Outflow of Cash | ||
| Sale of Plant and Machinery | 8,000 | |
| Outflow of Cash | ||
| Purchase of Plant and Machinery | 3,55,000 | 3,47,000 |
| Net cash used in investing Activities | 3,47,000 |
|
| (C) Cash flows from Financing Activities | ||
| Inflow of Cash | ||
| Share Capital Issued | 3,00,000 | |
| Outflow of Cash | ||
| Proposed dividend paid | 40,000 | 2,60,000 |
| Net cash flow from financing activities | 2,60,000 |
|
| Net decrease in cash & Cash equivalents (A + B + C) | 85,000 | |
| Add: cash equivalent at the beginning of the year | 3,15,000 | |
| Cash equivalent at the end of year | 4,00,000 | |
Working Note
| Plant and Machinery Account |
|||
| Particulars |
Amount ₹ |
Particulars |
Amount ₹ |
| To Balance b/d | 5,00,000 | By Depreciation |
50,000 |
| To Statement of Profit & Loss – Profit |
3,000 | By Bank A/c – Sale | 8,000 |
| To Bank –Purchase (Bal. fig.) | 3,55,000 | By Balance c/d | 8,00,000 |
| 8,58,000 | 8,58,000 | ||