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Cash Flow Statement—Based on Accounting Standard-3 (Revised) 3.19

B. Cash Flow from Investing Activities
Purchase of Non-current Investments (1,00,000)
Sale Proceeds of Machine 35,000
Purchase of Plant and Machinery (WN 2) (3,45,000)
Purchase of Land and Building (2,00,000)
Cash Used in Investing Activities (6,10,000)
C. Cash Flow from Financing Activities
Proceeds from Issue of Share Capital 2,00,000
Proceeds from 10% Debentures 2,00,000
Interest on Debentures (10,000)
Payment of Dividend (2,00,000)
Cash Flow from Financing Activities 1,90,000
D. Net Decrease in Cash and Bank Balances (A + B + C) (1,00,000)
E. Add: Opening Balance of Cash and Bank Balances 1,00,000
F. Closing Balance of Cash and Bank Balances (D + E) Nil

Working Notes:
1. Calculation of Net Profit before Tax: `
Closing Surplus, i.e., Balance in Statement of Profit and Loss 1,00,000
Less: Opening Surplus, i.e., Balance in Statement of Profit and Loss 60,000
Net Profit 40,000
Add: Transfer to Reserve 50,000
Dividend Paid (Proposed Dividend for 2017–18) 2,00,000
Provision for Tax (WN 3) 80,000 3,30,000
Net Profit before Tax 3,70,000

2. Dr. PLANT AND MACHINERY ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 5,00,000 By Depreciation A/c 1,25,000
To Gain (Profit) on Sale of Plant A/c 15,000 By Bank A/c 35,000
(Statement of Profit and Loss) By Balance c/d 7,00,000
To Bank A/c (Balancing Figure) 3,45,000
(Purchase) 8,60,000 8,60,000

3. Dr. PROVISION FOR TAX ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c 50,000 By Balance b/d 70,000
To Balance c/d 1,00,000 By Statement of Profit and Loss (Bal. Fig.) 80,000
1,50,000 1,50,000
Illustration 11.

From the following Balance Sheet of New Light Ltd. as at 31st March, 2019 and information,
prepare Cash Flow Statement for the year ended 31st March, 2019: