Question 64 Chapter 15 of Class 12 Part – 2 – 2024

Question 64 Chapter 15 of Class 12 Part – 2 – 2024

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

BALANCE SHEETS
Particulars	Note No.	31st March,2018	31st March,2017
I. Equity and Liabilities
Shareholders Fund :
Share Capital		4,00,000	3,00,000
Reserves and Surplus
Balance in Statement of Profit and Loss		1,50,000	1,10,000
Preliminary expenses		-10,000	-12,000
Non-Current Liabilities
Long-term Borrowings :
8% Debentures		1,00,000	1,50,000
Current Liabilities
Trade Payable		70,000	90,000
Provision for Taxation		80,000	80,000
Total		7,90,000	7,18,000
II. Assets
Non-Current Assets :
Tangible Assets
Machinery		4,30,000	2,98,000
Investments		60,000	1,00,000
Intangible Assets
Goodwill		90,000	1,00,000
Current Assets :
Inventories		80,000	50,000
Trade Receivable		1,10,000	1,60,000
Cash at Bank		20,000	10,000
Total		7,90,000	7,18,000

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 15 of Class 12 Part – 2 – 2024: – 

Cash Flow Statement for the year ended 31st March 2016
Particulars		Rs
(A) Cash Flow from Operating Activities
Net Profit before Tax and Extraordinary Items*		40,000
Add: Provision for Taxation	75,000
Adjustment of non-Cash & Non-Operating Items
Add: Preliminary expenses	30,000
Interest on Debentures	42,000
Goodwill	10,000
Depreciation	20,000
Premium on redemption of debentures	20,000
Less: Profit on Sale of Investments	10,000	25,000
Cash operating Profit before Working Capital adj.		83,000
Add: Decrease in current assets:
Trade Receivables	50,000
Less: Increase in current Assets:
Inventories	20,000
Less: Decrease in Current Liabilities
Trade Payables	30,000
Less: Income Tax Paid		75,000
Cash flow from Operating Activities		1,29,000
(B) Cash flows from Investing Activities
Inflow of Cash
Sale of Investment	50,000
Outflow of Cash
Purchase of Machinery	2,02,000
Net cash used in investing Activities		1,52,000
(C) Cash flows from Financing Activities
Inflow of Cash
Issue of Share Capital	1,00,000
Outflow of Cash
Redemption of Debentures at 10% Premium	55,000
Interest on debentures	12,000	33,000
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
Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	2,98,000	By Depreciation	70,000
To Bank –Purchase (Bal. fig.)	2,02,000	By Balance c/d	4,30,000
	5,00,000		5,00,000

investment Account
Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	1,00,000	By Bank – Sale (Bal. fig.)	50,000
To Statement of Profit & Loss – Profit on sale	10,000	By Balance c/d	60,000
	1,10,000		1,10,000

Provision for Taxation Account
Particulars	Amount ₹	Particulars	Amount ₹
To Machinery A/c	75,000	By Balance b/d	80,000
To Balance c/d	80,000
		By Profit & Loss A/c – (Bal. fig.)	75,000
	1,55,000		1,55,00

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