Page 34 - MA12

Cash Flow Statement—Based on Accounting Standard-3 (Revised) 3.9
Solution: CASH FLOW STATEMENT for the year ended 31st March, 2019
Particulars `
I. Cash Flow from Operating Activities
Net Profit before Tax (Note 1) 20,000
Add: Non-cash and Non-operating Expenses:
Goodwill Amortised 8,000
Interest on 12% Debentures (Note 2) 12,000 20,000
Operating Profit before Working Capital Changes 40,000
Add: Increase in Current Liabilities:
Creditors 20,000
Bills Payable 80,000 1,00,000
1,40,000
Less: Increase in Current Assets and Decrease in Current Liabilities:
Outstanding Expenses 5,000
Inventories 20,000
Trade Receivables 20,000 45,000
Cash Flow from Operating Activities 95,000
II. Cash Flow from Investing Activities
Purchase of Land and Building (80,000)
Loans and Advances (30,000)
Cash Used in Investing Activities (1,10,000)
III. Cash Flow from Financing Activities
Proceeds from Issue of Equity Shares 50,000
Redemption of 12% Debentures (20,000)
Interest on 12% Debentures (12,000)
Cash Flow from Financing Activities 18,000
IV. Net Increase in Cash and Bank Balances (I + II + III) 3,000
V. Cash and Bank Balances in the beginning of the year 15,000
VI. Cash and Bank Balances at the end of the year (IV + V) 18,000
Notes:
1. Calculation of Net Profit before Tax: `
Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 70,000
Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 50,000
Net Profit before Tax 20,000
2. Debenture interest @ 12% on ` 1,00,000.
Illustration 7.
The Balance Sheet of Rajneesh Ltd. as at 31st March, 2019 is as follows:
Particulars Note No. 31st March, 31st March,
2019 (`) 2018 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 1,25,000 1,00,000
(b) Reserves and Surplus 1 33,800 30,250
2. Non-Current Liabilities
Long-term Borrowings (Debentures) 7,500 10,000
3. Current Liabilities
(a) Short-term Borrowings 2 ... 35,000
(b) Trade Payables 72,600 75,000
(c) Short-term Provisions 3 16,500 15,000
Total 2,55,400 2,65,250