Page 29 - MA12

3.4 Management Accounting (Section B)—ISC XII

Solved Questions

Illustration 1.
From the following Balance Sheet of G & S Ltd. as at 31st March, 2019 and the additional
information, calculate Cash Flow from Investing Activities:
Particulars Note No. 31st March, 31st March,
2019 (`) 2018 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 6,00,000 5,00,000
(b) Reserves and Surplus 8,50,000 7,00,000
2. Current Liabilities 4,10,000 3,55,000
Total 18,60,000 15,55,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets—Tangible Assets 1 15,00,000 13,00,000
(b) Non-Current Investments 1,00,000 50,000
2. Current Assets
(a) Trade Receivables 2,00,000 1,80,000
(b) Cash and Bank Balances 60,000 25,000
Total 18,60,000 15,55,000
Note to Accounts
Particulars 31st March, 31st March,
2019 (`) 2018 (`)
1. Fixed Assets—Tangible Assets
Plant and Machinery (Net) 8,00,000 6,00,000
Land and Building (Net) 7,00,000 7,00,000
15,00,000 13,00,000

Additional Information: During the year the company sold machinery at book value for ` 2,00,000.
Solution: CASH FLOW FROM INVESTING ACTIVITIES
Particulars `
Purchase of Plant and Machinery (WN) (4,00,000)
Proceeds from Sale of Plant and Machinery 2,00,000
Purchase of Non-current Investments (50,000)
Cash Used in Investing Activities (2,50,000)

Working Note:
Dr. PLANT AND MACHINERY ACCOUNT Cr.
Particulars ` Particulars `

To Balance b/d 6,00,000 By Bank A/c (Sale) 2,00,000
To Bank A/c (Purchase) 4,00,000 By Balance c/d 8,00,000
(Balancing Figure)
10,00,000 10,00,000