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M.406 An Aid to Accountancy—CBSE XII

23. CASH FLOW STATEMENT (as per AS–3) for the year ended 31st March, 2018
Particulars ` `
A. Cash Flow from Operating Activities
Net Profit before Tax and Extraordinary Items:
Surplus, i.e., Balance in Statement of Profit and Loss (Closing) 2,15,000
Less: Surplus, i.e., Balance in Statement of Profit and Loss (Opening) 1,70,000
Profit for the Year 45,000
Add: Transfer to General Reserve (` 1,00,000 – ` 80,000) 20,000
Interim Dividend Paid 25,000
Net Profit before Tax and Extraordinary Items 90,000
Add: Depreciation on Machinery (WN 2) 1,10,000
Loss on Sale of Machinery (WN 1) 6,000
Interest on Debentures 15,000
[(` 1,00,000 × 10/100 × 6/12) + (` 2,00,000 × 6/12 × 10/100)]
Operating Profit before Working Capital Changes 2,21,000
Add: Decrease in Current Assets and Increase in Current Liabilities:
Inventories 30,000
Trade Payables 60,000
3,11,000
Less: Increase in Current Assets:
Trade Receivables 50,000
Cash Flow from Operating Activities 2,61,000
B. Cash Flow from Investing Activities
Purchase of Machinery (WN 1) (3,40,000)
Purchase of Non-Current Investments (20,000)
Proceeds from Sale of Machinery (WN 1) 24,000
Cash Used in Investing Activities (3,36,000)
C. Cash Flow from Financing Activities
Proceeds from Issue of Equity Shares [` 1,00,000 + ` 15,000 (Premium)] 1,15,000
Proceeds from Issue of Debentures [` 1,00,000 – ` 10,000 (Discount)] 90,000
Interim Dividend Paid (25,000)
Interest on Debentures Paid (15,000)
Cash Flow from Financing Activities 1,65,000
D. Net Increase in Cash and Cash Equivalents (Cash and Bank Balances) (A + B + C) 90,000
Add: Opening Balance of Cash and Cash Equivalents (Cash and Bank Balances) 1,30,000
E. Closing Balance of Cash and Cash Equivalents (Cash and Bank Balances) 2,20,000
Working Notes:
1. Dr. MACHINERY ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 6,10,000 By Accumulated Depreciation A/c 70,000
To Bank A/c (Purchase) 3,40,000 By Bank A/c (Sale Proceeds)* 24,000
(Balancing Figure) By Loss on Sale of Machinery A/c 6,000
(Statement of Profit and Loss)
By Balance c/d 8,50,000
9,50,000 9,50,000