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Model Test Papers M.125

II. Cash Flow from Investing Activities
Proceeds from Sale of Land and Building 1,65,000
Purchase of Non-current Investments (1,00,000)
Cash Flow from Investing Activities 65,000
III. Cash Flow from Financing Activities
Payments for Redemption of 10% Debentures (2,00,000)
Proceeds from Bank Loan 1,00,000
Payment of Dividend (1,50,000)
Payment of Dividend Distribution Tax (15,000)
Cash Used in Financing Activities (2,65,000)
IV. Net Increase in Cash and Cash Equivalents (I + II + III) 35,000
Add: Opening Cash and Cash Equivalents 3,40,000
V. Closing Cash and Cash Equivalents 3,75,000
* Proposed Dividend for the year ended 31st March, 2017 paid in the year ended 31st March, 2018.

Working Notes:
1. It is assumed that 10% Debentures have been redeemed in the beginning of the year. Therefore, interest is
not provided.
2. Dr. LAND AND BUILDING ACCOUNT Cr.

Particulars ` Particulars `
To Balance b/d 8,00,000 By Bank A/c (Sale) (` 1,50,000 + ` 15,000) 1,65,000
To Gain (Profit) on Sale of Land and Building A/c 15,000 By Balance c/d 6,50,000
(Statement of Profit and Loss)
8,15,000 8,15,000