Prepare cash flow statement from the table and information given below: Liabilities 31st March, 2000 31st March, 2001 Assets 31st March, 2000 31st March, 2001 Share Capital 4,50,000 4,50,000 Fixed assets 4,00,000 3,20,00

CS Professional · Valuations & Business Modelling · PYQS · June 2021
Prepare cash flow statement from the table and information given below: Liabilities 31st March, 2000 31st March, 2001 Assets 31st March, 2000 31st March, 2001 Share Capital 4,50,000 4,50,000 Fixed assets 4,00,000 3,20,000 General Reserve 3,00,000 3,10,000 Investments 50,000 60,000 Profit & Loss 56,000 68,000 Stock 2,40,000 2,10,000 Creditors 1,68,000 1,34,000 Debtors 2,10,000 4,55,000 Provision for Tax 75,000 10,000 Bank Balances 1,49,000 1,97,000 Mortgage 2,70,000 10,49,000 12,42,000 10,49,000 12,42,000 Additional Information: Investments costing ₹ 8,000 were sold during the year 2000-2001 for ₹ 8,500. Provision for tax made during the year was ₹ 9,000. During the year, part of the fixed assets costing ₹ 10,000 was sold for ₹ 12,000, profit was included in the profit and loss account. Dividends paid during the year amounted to ₹ 40,000.

Answer & Explanation:

Answer 6(a) Cash flow statement for the year ended March 31st, 2001 Particulars Amount (₹) Amount (₹) (A) Cash flow from operating activities Profit made 12,000 Add: Non cash or non-operating items Interim dividend 40,000 Provision for tax 9,000 Transfer to reserve 10,000 Net profit before tax and extraordinary items 71,000 Add: Depreciation 70,000 Less: Profit on sale of investments (500) Less: Profit on sale of fixed assets (2,000) Operating profit before working capital changes 1,38,500 Add: Decrease in current assets and increase in current liabilities Decrease in stock 30,000 Less: Increase in current assets and decrease in current liabilities Increase in debtor (2,45,000) Decrease in creditor (34,000) (2,49,000) Cash generated from operations (1,10,500) Less: Income tax paid (74,000) Net cash used in operating activities (1,84,500) (B) Cash flow from investing activities Purchase of investments (18,000) Sale of fixed assets 12,000 Sale of investments 8,500 Net cash flow from investing activities 2,500 (C) Cash flow from financing activities Mortgages loan 2,70,000 Dividend paid (40,000) Net cash flow from financing activities 2,30,000 Increase in cash and cash equivalents (A+B+C) 48,000 Cash and cash equivalents at the beginning of the year 1,49,000 Cash and cash equivalents at the end of the year 1,97,000 Working Notes Investment Account Particulars Amount (₹) Particulars Amount (₹) To Balance b/d 50,000 By Bank 8,500 To Profit 500 To Bank (Purchase) 18,000 By Balance c/d 60,000 68,500 68,500 Fixed Assets Account Particulars Amount (₹) Particulars Amount (₹) To Balance b/d 4,00,000 By Bank 12,000 To Profit 2,000 By Depreciation (Balance) 70,000 By Balance c/d 3,20,000 4,02,000 4,02,000 Provision for Taxation A/c Particulars Amount (₹) Particulars Amount (₹) To Cash (Tax Paid) 74,000 By Balance b/d 75,000 To Balance c/d 10,000 By P&L 9,000 84,000 84,000

Topics: Financial Statement Analysis

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