Page 211 - AAAXII

Model Test Papers M.201

23. Pioneer Traders Ltd.
CASH FLOW STATEMENT for the year ended 31st March, 2018
Particulars ` `
I. Cash Flow from Operating Activities
Net Profit (` 2,00,000 – ` 1,00,000) 1,00,000
Add: Provision for Tax (WN 2) 80,000
Dividend Payable (Last Year’s Proposed Dividend) 60,000
Net Profit before Tax and Extraordinary Items 2,40,000
Adjustment for Non-Cash and Non-Operating Items:
Add: Depreciation on Machinery 12,000
Loss on Sale of Machinery 5,000
Amortisation of Patents 5,000
Interest on Bank Loan (10% of ` 1,00,000) 10,000 32,000
Operating Profit before Working Capital Changes 2,72,000
Change in Current Assets and Current Liabilities:
Decrease in Trade Payables (15,000)
Increase in Inventories (5,000)
Increase in Trade Receivables (1,35,000) (1,55,000)
Cash Generated from Operating Activities before Tax 1,17,000
Less: Tax Paid 50,000
Cash Flow from Operating Activities 67,000
II. Cash Flow from Investing Activities
Purchase of Non-Current Investments (75,000)
Purchase of Machinery (75,000)
Proceeds from Sale of Machinery (WN 1) 58,000
Cash Used in Investing Activities (92,000)
III. Cash Flow from Financing Activities
Proceeds from Issue of Shares 2,00,000
Bank Loan Repaid (1,00,000)
Interest on Bank Loan Paid (10,000)
Dividend Paid [(` 60,000 – ` 20,000 (Unpaid)] (40,000)
Cash Flow from Financing Activities 50,000
IV. Net Increase in Cash and Cash Equivalents (I + II + III) 25,000
V. Opening Cash and Cash Equivalents 20,000
VI. Closing Cash and Cash Equivalents (IV + V) 45,000
Working Notes:
1. Dr. MACHINERY ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 6,00,000 By Depreciation A/c 12,000
To Bank A/c (Purchase) 75,000 By Bank A/c (Sale) (Balancing Figure) 58,000
By Loss on Sale of Machinery A/c 5,000
(Statement of Profit and Loss)
By Balance c/d 6,00,000
6,75,000 6,75,000

2. Dr. PROVISION FOR TAX ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c (Tax Paid) 50,000 By Balance b/d 40,000
To Balance c/d 70,000 By Statement of Profit and Loss (Bal. Fig.) 80,000
1,20,000 1,20,000