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NCERT Solutions for Class 12 Accountancy Ii Chapter 6 Cash Flow Statement

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NCERT Solutions for Chapter 6 Cash Flow Statement Format Class 12 - FREE PDF Download

Vedantu’s NCERT Solutions for Accountancy Chapter 6 - Cash Flow Statement Class 12 according to the latest CBSE Class 12 Accountancy syllabus explores the preparation and analysis of cash flow statements, an essential part of financial accounting. 

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Table of Content
1. NCERT Solutions for Chapter 6 Cash Flow Statement Format Class 12 - FREE PDF Download
2. Glance on NCERT Solutions for Class 12 Accountancy Chapter 6 - Cash Flow Statement
3. Access NCERT Solutions for Class 12 Accountancy Chapter 6 – Cash Flow Statement
4. Topics Covered in Chapter 6 Accountancy Class 12 -  Cash Flow Statement
5. Benefits of NCERT Solutions for Class 12 Accountancy Chapter 6 – Cash Flow Statement
6. Conclusion
7. Related Links for Class 12 Chapter 6  - Cash Flow Statement
8. NCERT Solutions for Class 12 Accountancy- Other Chapter-wise Links - FREE PDF
9. Related Important Links for Class 12 Accountancy Part II
FAQs

These solutions of cash flow statement format class 12 help students understand the format and components of cash flow statements, including operating, investing, and financing activities. The Class 12 Accountancy NCERT Solutions offers clear, step-by-step explanations, prepared by Vedantu’s Master teachers to help students understand the concepts.


Glance on NCERT Solutions for Class 12 Accountancy Chapter 6 - Cash Flow Statement

  • Cash Flow Statement Questions With Solutions involves the preparation of cash flow statements, understanding cash inflows and outflows, and classification into operating, investing, and financing activities.

  • This chapter explores the crucial concepts of cash flow statements, which are important for assessing a company's financial health. 

  • It explains the classification of cash flows into three main activities: operating, investing, and financing.

  • Cash Flow Statement Questions include the primary revenue-generating activities of the business, such as cash receipts from sales and cash payments to suppliers and employees.

  • This chapter also focuses on cash flows from transactions with the company's owners and creditors, like issuing shares or repaying loans.

Access NCERT Solutions for Class 12 Accountancy Chapter 6 – Cash Flow Statement

Question 1 : What is a Cash Flow Statement?  

Answer: A cash flow statement is a statement that shows the inflow and the outflow of the cash and the cash equivalents from the operating, financing, and investing activities of the company. It records the receipts and the payments of the cash and the cash equivalents that any business incurs during the particular accounting year. The statement of the cash flow helps to establish the ability and the position of the business to generate cash for its varying needs. 


Question 2 : How are the various activities classified (as per AS-3 revised) while preparing cash flow statements? 

Answer: As per AS-3 the following are the various activities classified while preparing a cash flow statement: Operating activity – Operating Activity includes all the activities that create and generate revenue for any business. For example, a company dealing with the garments will have its operating activity in the form of procurement of the raw materials, expenses made for manufacturing the garments, etc.

Investing activity – This includes all the transactions that are related to the long-term investments made by the company. Examples of this can include the sale and purchase of the fixed asset such as plants and Machinery. Financing activities – The financing activity includes all the transactions that are related to the acquiring of capital or long-term funds for any business. Examples of this can be the cash proceeds by the business from the issue of the equity shares and debentures etc. 


Question 3: State the Objective of the cash flow statement. 

Answer: The uses of the cash flow statement are as follows:

  • Cash flow statement is useful in providing information about the changes in the financial structure and the net assets and the amount which is generated with the inflows of the cash. 

  • Cash flows are useful in providing information about the cash-generating capacity of the business by indicating the position of the business in terms of the cash and the cash equivalents. 

  • Cash flows help the business to make comparisons about the operating performance of the business as the accounting treatments and practices might be different in the different enterprises and the cash flow statement will thus help the businesses to determine the cash generating capacity of them. 

  • The cash flow records the transactions at their historical cost which can help the users to determine important information about the transactions as and when they require.


Question 4: What are the objectives of preparing a cash flow statement?

Answer: The objectives of the preparation of the cash flow statement are as follows:

  • The cash flow statement is helpful for the management to make the proper usage of the cash. 

  • The cash flow statement helps the management of the organisation by allowing them to take corrective actions in cases when there is a misappropriation of the cash by the management. 

  • It helps organisations to establish the need for cash for a specific period to ascertain the smooth functioning of the business. 

  • It is useful in tracking the inflow and the outflow of the cash in the business for a particular accounting period. 

  • It allows the management of the organisation to determine the decisions about the short-term financial requirements of the management.


Question 5: State the meaning of the terms: 

(i) Cash Equivalents

(ii) Cash flows. 

Answer:

(i) The short-term liquid investments that are made by any business which are not subjected to any change in their values are referred to as cash equivalents. The cash equivalents are held by the business to meet their short-term needs and commitments for investment purposes. 

(ii) Cash flows are referred to as the movement of the cash inside and outside the business from the non-cash items. Thus when the cash is generated from the transaction of any non-cash item, then it is referred to as the cash inflow; on the other hand when the cash goes out of the business to meet the requirements for the transactions of any non-cash item, then it is referred to as the cash outflows.


Question 6: Prepare a format of cash flow from operating activities.

Answer: The following is the format of the cash flows from operating activities.


Net profit before tax

(add) deductions made in P&L made for non-cash items like depreciation, goodwill to be written off

(add) deductions made in P&L made for non-operating items like interest

(less) additions made in P&L for non-operating items like dividends received and profit on sale of fixed assets

Operating profit before changes in working capital

(add) increase in current liabilities

(add) decrease in current assets

(less) increase in current assets 

(less) decrease in current liabilities 

Cash flows from operating activities before tax and 

extraordinary items 

(less) income tax 

(add/less) effects of extraordinary items 

Net cash from operating activities 


Question 7: State clearly what would constitute the operating activities for each of the following in the following enterprises:

(i) Hotel 

(ii) Film production house 

(iii) Financial enterprise 

(iv) Media enterprise 

(v) Steel manufacturing unit 

(vi) Software development business unit. 

Answer: The following are the operating activities of the following enterprises: 

(i) Hotel – The receipt that comes from the sales made to the customers will be the cash inflows and the expenses such as salaries, rent, groceries, etc. will be regarded as the cash outflows. 

(ii) Film production house – The sale of the film rights to the distributors will be regarded as the inflows, while the salaries paid to the actors, rent paid for the location, etc. will be regarded as the outflows.   

(iii) Financial enterprise – The receipts that are received on the repayments of the loan and the interest on the loans will be the inflows and on the other hand, the outflows will be the salaries, loan recovery expenses, etc. 

(iv) Media enterprise – Receipts which are generated from the advertisements will be regarded as the inflows and expenses which are made in the form of the payment of the salaries will be regarded as the outflows. 

(v) Steel manufacturing unit – The sale of steel sheets, steel rods, etc. will be regarded as the inflows while the outflows that occur due to the purchase of the raw materials, wages, etc. will be the outflows. 

(vi) Software business unit – The receipt is generated from the sale of software and the renewal of licences will be regarded as the inflows and the payment of salaries etc. will be regarded as the outflows.


Question 8: “The nature/type of enterprise can change altogether the category into which a particular activity may be classified.” Do you agree? Illustrate your answer. 

Answer: The nature and the type of the business can rightly change the category into which the particular activity may be classified. For instance, a firm that is engaged in the purchase of the land and the buildings will have its operating activities which are in the form of sale and the purchase of the land. On the other hand, the sale and purchase of the land will be not regarded as operational activity in cases 

of the other businesses.


Question 9: Describe the procedure to prepare a Cash Flow Statement. Answer: 

  • Answer: The procedure to make the cash flow is as follows:

  • Firstly, determine the flows of the cash from the operating activities of the business. 

  • Next, the business shall determine the flows of the cash from its investing activities. 

  • Then it must determine the flows of the cash from its financing activities. 

  • The next step involves the total of the sum of all the three activities. 

  • The final step involved the deduction of the opening balance of the cash and the cash equivalents from the resulting sum of all three activities which will result in the figure which is the closing balance of the cash and the equivalents of the cash.


Question 10: Describe the "Indirect" method of ascertaining Cash Flow from Operating Activities. 

Answer: The indirect method of ascertaining the cash flow from the operating activities involves all the non-operating and the non-cash items. Under this method, cash flow is ascertained from the flow of the cash of the operating activities beginning with the net profit or the net loss. The income statement in this method is on the accrual basis which hence includes both non-operating items such as interest paid, loss, or the profit made on the sale of any fixed assets; and the non-cash items such as write-off of the goodwill, and depreciation. Following is the sample of the net cash flows from the operating activities:

 

Net profit before tax

(add) deductions made in P&L made for non-cash items like depreciation, goodwill to be written off

(add) deductions made in P&L made for non-operating items like interest

(less) additions made in P&L for non-operating items like dividends received and profit on sale of fixed assets

Operating profit before changes in working capital

(add) increase in current liabilities

(add) decrease in current assets

(less) increase in current assets

(less) decrease in current liabilities

Cash flows from operating activities before tax and extraordinary items

(less) income tax

(add/less) effects of extraordinary items

Net cash from operating activities


Question 11: Explain the major Cash Inflow and outflows from investing activities.

Answer: Cash flows are referred to as the movement of the non-cash items of the business in and outside the business. Thus the cash inflow is referred to as the situation in which the cash comes from a non-cash item and on the other hand when the cash is used by the business to get the noncash item it is referred to as cash outflow. The transactions of the business which are related to the long-term investments in the business are called the investing activities.

The example of the cash flow from the investing activities is as follows:

Sale of machinery – Cash inflows 

Purchase of machinery – Cash outflows


Question 12: Explain the major Cash flows and outflows from financing activities. 

Answer: Cash flows are referred to as the movement of the non-cash items of the business in and outside the business. Thus the cash inflow is referred to as the situation in which the cash comes from a non-cash item and on the other hand when the cash is used by the business to get the noncash item it is referred to as cash outflow. For instance, the sale of the computer of the business generates cash for the business and hence is cash inflow and on the other hand the cash spent on the purchase of the new computer is the cash outflow. The financing activity refers to all those transactions that are related to the acquiring of long-term capital or funds for the business. Thus, the cash flow from the financing activities can be in the following forms:

Proceed from long-term borrowings – Cash inflows

Repayment of long-term borrowings – Cash outflows


Question 13: Anand Ltd. arrived at a net income of Rs 5,00,000 for the year ended March 31, 2017. Depreciation for the year was Rs 2,00,000. There was a gain of Rs 50,000 on assets sold which was credited to the profit and loss account. Bills Receivables increased during the year by Rs 40,000 and Bills Payables also increased by Rs 60,000. Compute the cash flow operating activities by the indirect approach.

Answer:


Cash Flow from Operating Activities as of March 31, 2017

Particulars

Amount

Amount

Rs

Rs

Net Profit during the year

 

500000

Items to be adjusted:

 

 

Add: Depreciation

200000

 

Less: Gain on sale of assets

-50000

150000

Operating Profit before Working Capital changes

 

650000

Add: Increase in Bills Payable

60000

 

Less: Increase in Bills Receivables

-40000

20000

Net Cash from Operations

 

670000


Question 14: From the information given below you are required to prepare the cash paid for the inventory:


 

Rs

Inventory in the beginning

40,000

Purchases

1,60,000

Inventory in the end

38,000

Trade payables in the beginning

14,000

Trade payables in the end

14,500


Answer:


Trade Payable A/c

Date

Particular

Amount

Date

Particular

Amount

 

Cash (B.F.)

159500

 

Balance b/d

14000

 

Balance c/d

14500

 

Purchases

160000

 

 

174000

 

 

174000


Cash paid for Inventory amounts to Rs.159500.


Question 15: For each of the following transactions, calculate the resulting cash flow and state the nature of cash for low vis., operating, investing, and f, financing.

(a) Acquired machinery for Rs 2,50,000 paying 20% drawn and executing a bond for the balance payable.

(b) Paid Rs 2,50,000 to acquire shares in Informa Tech. and received a dividend of Rs 50,000 after the acquisition.

(c) Sold machinery of original cost Rs 2,00,000 with an accumulated depreciation of Rs 1,60,000 for Rs 60,000.

Answer: (a) Amount paid for Machinery = 250000 x 20/100 = 50000

Part-payment Rs. 500 of 00 for acquiring machinery Rs.250000 is related to Voting Activities.

(b) Amount paid for acquiring shares (250000) 

Dividend received  50000

Net Cash used in Investing Activities (200000)

AmountThe amount to acquire assets and divided dividends is a part of Investing Activities.

(c) InflowThe inflows of Rs.60000 on the sale of other machinery are part of Investing Activities.


Question 16: The following is the Profit and Loss Account of Yamuna Limited:

Statement of Profit and Loss of Yamuna Ltd. for the Year ended March 31, 2017


Particulars

Note No.

Amount (Rs)

i)

Revenue from Operations

 

10,00,000

ii)

Expenses

 

 

 

Cost of Material Consumed

1

50,000

 

Purchase of Stock-in-trade

 

5,00,000

 

Other Expenses

2

3,00,000

 

Total Expenses

 

8,50,000

iii)

Profit before Tax (I – ii)

 

1,50,000


Additional information:

(i) Trade receivables decreased by 30,000 during the year.

(ii) Prepaid expenses increase by Rs 5,000 during the year.

(iii) Trade creditors decreased by Rs 15,000 during the year.

(iv) Outstanding expenses payable increased by Rs 3,000 during the year.

(v) Operating expenses included depreciation of Rs 25,000.

Compute net cash provided by operations for the year ended March 31, 2017, by the indirect method.

Answer:


Cash Flow from Operating Activities as of March 31, 2017

 

Particulars

Amount

Amount

Rs

Rs

Net Profit earned during the year

 

150000

Items to be added:

 

 

Depreciation

25000

25000

Operating Profit before Working Capital changes

 

175000

Add: Increase in Current Liabilities

 

 

O/s Expenses

3000

 

Add: Decrease in Current Assets

 

 

Stock

50000

83000

Less: Decrease in Current Liabilities

 

 

Trade Creditors

-15000

 

Less: Increase in Current Assets

 

 

Prepaid Expenses

-5000

-20000

Net Cash from Operations

 

238000


Question 17: Compute cash from operations from the following figures:

(i) Profit for the year 2016-17 is a sum of Rs. 10,000 after providing for depreciation of Rs. 2,000.

(ii) The current assets of the business for the year ended March 31, 2016 and 2017 are as follows:


Particulars

March

31, 2016 (Rs.)

March

31, 2017 (Rs.)

Trade Receivables

14,000

15,000

Provision for Doubtful Debts

1,000

1,200

Trade Payables

13,000

15,000

Inventories

5,000

8,000

Short-term Investments

10,000

12,000

Expenses payable

1,000

1,500

Prepaid Expenses

2,000

1,000

Accrued Income

3,000

4,000

Income received in advance

2,000

1,000


Answer:


Cash Flow Statement for the year ending March 31, 2017

Particulars

Amount

Amount

Rs

Rs

Cash Flow from Operating Activities

 

 

Net Profit

 

10000

Items to be added:

 

 

Depreciation

2000

2000

Operating Profit before Working Capital changes

 

12000

Less: Increase in Current Assets

 

 

Trade Receivables

-1000

 

Accrued Income

-1000

 

Other Current Assets

-2000

 

Inventories

-3000

 

Add: Increase in Current Liabilities

 

 

Provision for Doubtful Debts

200

 

Trade Payables

2000

 

Expense Payable

500

 

Add: Decrease in Current Assets

 

 

Prepaid Expenses

-1000

 

Less: Decrease in Current Liabilities

 

 

Income received in advance

1000

-4300

Net Cash from Operating Activities

 

7700


Question 18: From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also, show the workings of preparing the ledger accounts:

Balance Sheet of Bharat Gas Ltd. as on 31 Mar. 2016 and 31 Mar. 2017


Particulars

Note No.

Figures as of the end of 2017

(Rs)

Figures as on and off reporting 2016

(Rs)

II) Assets

 

 

 

1. Non-current Assets

 

 

 

a) Fixed assets

 

 

 

i) Tangible assets

1

12,40,000

10,20,000

ii) Intangible assets

2

4,60,000

3,80,000

b) Non-current

investments

3

3,60,000

2,60,000


Notes:

1

Tangible assets = Machinery

 

2

Intangible assets = Patents


Notes

 

Figures of

current year

Figures of

previous year

1. Tangible Assets Machinery

 

 


12,40,000

10,20,000


 

 

2. Intangible Assets Goodwill Patents

3,00,000

1,00,000


1,60,000

2,80,000

 

4,60,000

3,80,000

 

 

 

3. Non-current Investments

 

 

10% long term investments

1,60,000

60,000

Investment in land

1,00,000

1,00,000

Shares of Amartex Ltd.

1,00,000

1,00,000

 

3,60,000

2,60,000

 

 

 


Additional Information:

(a) Patents were written off to the extent of Rs. 40,000 and some Patents were sold at a profit of Rs. 20,000.

(b) A Machine costing Rs. 1,40,000 (Depreciation provided thereon Rs. 60,000) was sold for Rs. 50,000. Depreciation charged during the year was Rs. 1,40,000.

(c) On March 31, 2016, 10% of ments were purchased for Rs. 1,80,000, and some Investments were sold at a profit of Rs. 20,000. Interest on Investment was received on March 31, 2017.

(d) Amartex Ltd. paid dividends on its shares.

(e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs. 30,000.

Answer:


Cash Flow from Investing Activities

Particulars

Amount

Amount

Rs

Rs

Cash Inflow

 

 

Proceeds from the Sale of other f Patents

100000

 

Proceeds from the Sale of other Machinery

50000

 

Proceeds from Sale of 10% Long-term Investment

100000

 

Interest received on 10% Long-term Investment

 

6000

 

Dividend received from Amartex Ltd.

10000

 

Rent received

30000

296000

Cash Outflow

 

 

Purchase of Goodwill

-200000

 

Purchase of Machinery

-440000

 

Purchase of 10% Long-term Investment

 

-180000

 

-820000

Net Cash Used in Investing Activities

 

-524000


Patents A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

280000

 

P/L (written off)

40000

 

P/L (Profit on Sale)

 

20000

 

Bank (Sale) (B.F.)

 

100000

 

 

 

 

Balance c/d

160000

 

 

300000

 

 

300000

Machinery A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

1020000

 

Depreciation

140000

Patents A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

280000

 

P/L (written off)

40000

 

P/L (Profit on Sale)

 

20000

 

Bank (Sale) (B.F.)

 

100000

 

 

 

 

Balance c/d

160000

 

 

300000

 

 

300000


Machinery A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

1020000

 

Depreciation

140000


Patents A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

280000

 

P/L (written off)

40000

 

P/L (Profit on Sale)

 

20000

 

Bank (Sale) (B.F.)

 

100000

 

 

 

 

Balance c/d

160000

 

 

300000

 

 

300000

Machinery A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

1020000

 

Depreciation

140000


Question 19: From the following Balance Sheet of Mohan Ltd. Prepare the cash flow Statement:

Balance Sheet of Mohan Ltd.

as at 31 Mar. 2016 and 31 Mar. 2017


 

Particulars

Note No.

March 31, 2017

(Rs)

March 31, 2016

(Rs)

I) Equity and Liabilities

1

 

 

1. Shareholders’ Funds

 

 

a) Equity share capital

3,00,000

2,00,000

b) Reserves and surplus


2,70,000

2,20,000

2. Non-current liabilities

 

 

a) Long-term borrowings


80,000

1,00,000

3. Current liabilities

 

 

Trade payables

 

1,20,000

1,40,000

Short-term provisions

2



Total

 

7,70,000

6,60,000

II) Assets

 

 

 

1. Non-current assets

 

 

 

a) Fixed assets

3

5,00,000

3,20,000

2. Current assets

 

 

 

a) Inventories

 

1,50,000

1,30,000

b) Trade receivables

90,000

1,20,000

c) Cash and cash equivalents

4

30,000

90,000

Total

 

7,70,000

6,60,000

 

 

 

 


Notes to account


 

2017

2016

1. Long-term borrowings

 

 

Bank Loan

80,000

1,00,000

2. Fixed assets

6,00,000

4,00,000

Less: Accumulated Depreciation

1,00,000

80,000

(Net) Fixed Assets

5,00,000

3,20,000

3. Trade receivables

 

 

Debtors

60,000

1,00,000

Bills receivables

30,000

20,000

 

90,000

1,20,000

4. Cash and cash equivalents

 

 

Bank

30,000

90,000

 

 

 


Additional Information:

Machine Costing Rs. 80,000 on which accumulated depreciation was Rs. 50,000 was sold for Rs. 20,000.

Answer:


Cash Flow Statement of Mohan Ltd.

 

Particulars

Amount

Amount

Rs

Rs

A. Cash flow from Operating Activities

 

 

Profit as per the Balance Sheet

40000

 

Proposed Dividend

70000

 

Net Profit before Extraordinary Items

 

110000

Adjustments:

 

 

Depreciation

70000

 

Loss on Sale of Machine

10000

80000

Operating Profit before Working Capital changes

 

190000

Less: Increase in Current Assets

 

 

Inventories

-20000

 

Bill Receivables

-10000

 

Add: Decrease in Current Assets

 

 

Debtors

40000

 

Less: Decrease in Current Liabilities

 

 

Trade Payable

-20000

-10000

Net Cash from Operations

 

180000

B. Cash Flow from Investing Activities

 

 

Proceeds from Sale of Fixed Assets

20000

 

Purchase of Fixed Assets

-280000

 

Net Cash Outflow from Investing Activity

 

 

-260000

C. Cash Flow from Financing Activities

 

 

Issue of Shares

100000

 

Bank Loan paid

-20000

 

Dividend paid

-60000

 

Net Cash from Financing Activities

 

20000

D. Net Decrease in Cash and Cash Equivalents (A+B+C)

 

 

-60000

Add: Cash and Cash Equivalents in the beginning

 

90000

E. Cash and Cash Equivalents at the end

 

 

30000


Fixed Assets A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

400000

 

Bank

20000

 

Bank (Purchase)

(B.F.)

 

 

280000

 

 

 

P/L

 

 

10000

 

 

 

 

Accumulated Dep.

50000

 

 

 

 

Balance c/d

600000

 

 

680000

 

 

680000


Accumulated Depreciation A/c

Date

Particular

Amount

Date

Particular

Amount

 

Fixed Assets

50000

 

Balance b/d

80000

 

Balance c/d

100000

 

P/L (B.F.)

70000

 

 

150000

 

 

150000


Question 20: From the following Balance Sheets of Tiger Super Steel Ltd., prepare Cash Flow Statement:

Balance Sheet of Tiger Super Steel Ltd. as on 31 Mar. 2016 and 31 Mar. 2017


Particulars

Note No.

March

31, 2017 (Rs)

March

31, 2016 (Rs)

I) Equity and Liabilities

 

 

 

1. Shareholders’ Funds

 

 

 

a) Share capital

1

1,40,000

2,00,000

b) Reserves and surplus

2

38,400

26,400

2. Current Liabilities

 

 

 

a) Trade payables

3

21,200

14,000

b) Other current liabilities

4

2,400

3,200

c) Short-term provisions

5

12,800

11,200

Total

 

2,14,800

1,74,800

II) Assets

 

 

 

1. Non-Current Assets

 

 

 

a) Fixed assets

 

 

 

i) Tangible assets

6

96,400

76,000

ii) Intangible assets

 

18,800

24,000

b) Non-current investments

 

14,000

4,000

2. Current assets

 

 

 

a) Inventories

31,200

34,000

b) Trade receivables

43,200

30,000

c) Cash and cash equivalents

11,200

6,800

Total

2,14,800

1,74,800

 

 

 


Notes to accounts:


 

2017

2016

1. Share Capital

 

 

Equity share capital

1,20,000

80,000

10% Preference share capital

20,000

40,000

 

1,40,000

1,20,000

2. Reserves and surplus

 

 

General reserve

12,000

8,000

Balance in statement of profit and

loss

26,400

18,400

 

38,400

26,400

3. Trade payables

 

 

Bills payable

21,200

14,000

4. Other current liabilities Outstanding expenses


 


2,400

3,200

 

5. Short-term provisions

12800

11200

Provision for taxation



Proposed dividend



6. Tangible assets

 

 

Land and building

20,000

40,000

Plant

76,400

36,000

 

96,400

76,000

 

 

 


Answer:


Cash Flow Statement of Tiger Super Steels Ltd.

 

Particulars

Amount

Amount

Rs

Rs

A. Cash flow from Operating Activities

 

 

Profit as per the Balance Sheet

3600

 

General Reserve

4000

 

Proposed Dividend

15600

 

Provision for Taxation

12800

 

Net Profit before Taxation and Extraordinary

 

36000

Items to be added:

 

 

Depreciation on Land and Building

20000

 

Depreciation on Plant

10000

 

Goodwill written off

5200

35200

Operating Profit before Working Capital changes

 

71200

Less: Increase in Current Assets

 

 

Trade Receivables

-13200

 

Less: Decrease in Current Liabilities

 

 

O/s Expenses

-800

 

Add: Decrease in Current Assets

 

 

Inventories

2800

 

Add: Increase in Current Liabilities

 

 

Bills Payables

7200

-4000

Cash generated from Operating Activities

 

67200

Less: Income Tax paid

 

-11200

Net Cash from Operating Activities

 

56000

B. Cash Flow from Investing Activities

 

 

Purchase of Plant

 

-40400

Purchase of Investment

 

-20000

Net Cash Used in Investing Activities

 

-60400

C. Cash Flow from Financing Activities

 

 

Issue of Equity Shares

 

40000

Dividend paid

 

-11200

Redemption of 10% Preference Shares

 

-20000

Net Cash from Financing Activities

 

8800

D. Net Increase in Cash and Cash Equivalents (A+B+C)

 

4400

Add: Cash and Cash Equivalents at the beginning

 

6800

E. Cash and Cash Equivalents at the end

 

11200


Working Note: 1.


Plant A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

36000

 

Depreciation

10000

 

Bank (Purchase) (B.F.)

 

 

50400

 

 

 

Balance c/d

 

 

76400

 

 

86400

 

 

86400


2.

Net Profit Before Tax

3600

Profit and Loss Account

12800

Provision for Tax

16400


Question 21: From the following information, prepare cash flow statement:


 

Particulars

Note No.

31st March

2015 (Rs)

31st March

2014 (Rs)

I) Equity and Liabilities

 

 

 

1. Shareholders’ Funds

 

 

a) Share capital

7,00,000

5,00,000

b) Reserves and surplus

4,70,000

2,50,000

2. Non-current Liabilities

 

 

(8% Debentures)

4,00,000

6,00,000

3. Current Liabilities

 

 

a) Trade payables

9,00,000

6,00,000

Total

24,70,000

19,50,000

II) Assets

 

 

1. Non-current assets

 

 

 

a) Fixed assets

 

 

i) Tangible

7,00,000

5,00,000

ii) Intangible-Goodwill

1,70,000

2,50,000

2. Current assets

 

 

a) Inventories

6,00,000

5,00,000

b) Trade Receivables

6,00,000

4,00,000

c) Cash and cash

equivalents

4,00,000

3,00,000

Total

24,70,000

19,50,000

 

 

 


Additional Information: 

Depreciation Charge on Plant amounts to Rs. 80,000.

Answer:


Cash Flow Statement for the year ending March 31, 2015

Particulars

Amount

Amount

Rs

Rs

A. Cash flow from Operating Activities

 

 

Net Profit

 

220000

Items to be added:

 

 

Interest on Debentures

48000

 

Depreciation on Fixed Assets

80000

 

Goodwill written off

80000

208000

Operating Profit before Working Capital changes

 

428000

Add: Increase in Current Liabilities

 

 

Creditors

300000

 

Less: Increase in Current Assets

 

 

Inventories

-100000

 

Trade Receivables

-200000

-

Cash generated from Operating Activities

 

428000

Less: Income Tax paid

 

-

Net Cash from Operating Activities

 

428000

B. Cash Flow from Investing Activities

 

 

Purchase of Fixed Assets

-280000

 

Net Cash Used in Investing Activities

 

-280000

C. Cash Flow from Financing Activities

 

 

Issue of Share Capital

200000

 

Redemption of Debentures

-200000

 

Interest paid on Debentures

-48000

 

Net Cash from Financing Activities

 

-48000

D. Net Increase in Cash and Cash Equivalents (A+B+C)

 

 

100000

Add: Cash and Cash Equivalents in the beginning

 

300000

E. Cash and Cash Equivalents at the end

 

 

400000


Working Note:


Fixed Assets A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

500000

 

Depreciation

80000

 

Purchase (b/f)

280000

 

Balance c/d

700000

 

 

780000

 

 

780000

Question 22: From the following Balance Sheet of Yogeta Ltd., prepare cash flow statement:


 

Particulars

Note No.

31st March

2017 (Rs)

31st March

2016 (Rs)

I) Equity and Liabilities

 

 

 

1. Shareholders’ Funds

 

 

 

a) Share capital

1

4,00,000

2,00,000

b) Reserves and surplus-

Surplus

 

2,00,000

1,00,000

2. Non-current Liabilities

 

 

 

a) Long-term borrowings

2

1,50,000

2,20,000

3. Current Liabilities

 

 

 

a) Short-term borrowings

 

1,00,000

-

(Bank overdraft)

 

 

 

b) Trade payables

 

70,000

50,000

c) Short-term provision

 

50,000

30,000

(Provision for taxation)

 

 

 

Total

 

9,70,000

6,00,000

II) Assets

 

 

 

1. Non-current assets

 

 

 

a) Fixed assets

 

 

 

i) Tangible

 

7,00,000

4,00,000

2. Current assets

 

 

 

a) Inventories

 

1,70,000

1,00,000

b) Trade Receivables

 

1,00,000

50,000

c) Cash and cash

equivalents

 

-

50,000

Total

 

9,70,000

6,00,000

 

 


Notes to Accounts


Particulars

31st March 2017 (Rs)

31st March 2016 (Rs)

1. Share capital

 

 

a) Equity share capital

3,00,000

2,00,000

b) Preference share capital

1,00,000

-

 

4,00,000

2,00,000

2. Long term borrowings

 

 

Long-term loan

-

2,00,000

Long-term Rahul

1,50,000

20,000

 

1,50,000

2,20,000

 

 

 


Additional Information: Net Profit for the year after charging Rs. 50,000 as Depreciation was Rs. 1,50,000. Dividend paid on Share was Rs. 50,000, Tax Provision created during the year amounted to Rs. 60,000.


Answer:


Cash Flow Statement of Yogeta Ltd.

 

Particulars

Amount

Amount

Rs

Rs

A. Cash flow from Operating Activities

 

 

Profit as per the Balance Sheet

100000

 

Proposed Dividend

50000

 

Provision for Taxation

60000

 

Net Profit before Taxation and Extraordinary

 

210000

Items to be added:

 

 

Depreciation

50000

50000

Operating Profit before Working Capital changes

 

260000

Add: Increase in Current Liabilities

 

 

Trade Payable

20000

 

Less: Increase in Current Assets

 

 

Inventories

-70000

 

Trade Receivables

-50000

-100000

Cash generated from Operating Activities

 

 

160000

Less: Income Tax paid

 

-40000

Net Cash from Operating Activities

 

 

120000

B. Cash Flow from Investing Activities

 

 

Purchase of Fixed Assets

-350000

 

Net Cash used in Investing Activities

 

-350000

C. Cash Flow from Financing Activities

 

 

Issue of Equity Shares

100000

 

Issue of Preference Shares

100000

 

Loan from Rahul

130000

 

Less: Repayment of Loan

-200000

 

Dividend paid

-50000

 

Net Cash from Financing Activities

 

80000

D. Net Decrease in Cash and Cash Equivalents (A+B+C)

 

 

-150000

Add: Cash and Cash Equivalents in the beginning

 

50000

E. Cash and Cash Equivalents at the end

 

 

-100000


Working Note: 1


Provision for Taxation A/c

Date

Particular

Amount

Date

Particular

Amount

 

Bank (B.F.)

40000

 

Balance b/d

30000

 

Balance c/d

50000

 

P/L

60000

 

 

90000

 

 

90000


2.

Fixed Assets A/c

Date

Particular

Amount

Date

Particular

Amount

 

Balance b/d

 

400000

 

 

Depreciation

 

50000

 

Bank

350000

 

Balance c/d

700000

 

 

750000

 

 

750000


Question 23: Following is the Financial Statement of Garima Ltd., prepare cash flow statement.


Particulars

Note No.

31st March 2017 (Rs)

31st March 2016 (Rs)

I) Equity and Liabilities

 

 

 

1. Shareholders’ Funds

 

 

 

a) Share capital

1

4,40,000

2,80,000

b) Reserve and surplus-

Surplus

2

40,000

28,000

2. Current Liabilities

 

 

 

a) Trade payables

 

1,56,000

56,000

c) Short-term provisions

 

12,000

4,000

(Provision for taxation)

 

 

 

Total

 

6,48,000

3,68,000

II) Assets

 

 

 

1. Non-current assets