Page 30 - MA12

Cash Flow Statement—Based on Accounting Standard-3 (Revised) 3.5
Illustration 2 (Treatment of final Dividend Payable).
Following figures have been taken from the Balance Sheet of ABC Ltd.

Particulars 31st March, 2018 31st March, 2019
` `
Surplus, i.e., Balance in Statement of Profit and Loss 3,00,000 5,40,000
Dividend Payable A/c Nil 24,000
Additional Information: Dividend proposed for the year 2017-18 was ` 1,80,000 and for the current
year 2018–19 is ` 2,16,000. Show how the related items will appear in Cash Flow Statement.
Solution: AN EXTRACT OF CASH FLOW STATEMENT for the year ended 31st March, 2019
Particulars `

A. Cash Flow from Operating Activities
Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 5,40,000
Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 3,00,000
2,40,000
Add: Dividend declared in the AGM during the year 2018–19 (Proposed Dividend for 2017–18) 1,80,000
Cash Flow from Operating Activities 4,20,000
B. Cash Flow from Financing Activities
Payment of dividend during the year 2018–19 (WN) 1,56,000
Cash used in Financing Activities 1,56,000
Working Note:
Dr. DIVIDEND PAYABLE ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c (Balancing Figure) 1,56,000 By Surplus, i.e., Balance in Statement of
To Balance c/d 24,000 Profit and Loss A/c 1,80,000
1,80,000 1,80,000

Illustration 3.
Statement of Profit and Loss of XYZ Ltd. for the year ended 31st March, 2019 and additional
information are given below. Calculate Cash Flow from Operating Activities.

STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2019
Particulars Note No. `
I. Revenue from Operations (Net Sales) 18,00,000
II. Other Income 1 22,000
III. Total Revenue (I + II) 18,22,000
IV. Expenses:
(a) Purchases of Stock-in-Trade 14,56,000
(b) Change in Inventories of Stock-in-Trade (16,000)
(Opening Inventories ` 80,000 and Closing Inventories ` 96,000)
(c) Employees Benefit Expenses 1,80,000
(d) Depreciation and Amortisation Expense 50,000
(e) Other Expenses 2 1,74,000
18,44,000
V. Net Loss for the Year (III – IV) (22,000)