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M.434 An Aid to Accountancy—CBSE XII

23. CASH FLOW STATEMENT
for the year ended 31st March, 2018

Particulars ` `
I. Cash Flow from Operating Activities
Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 6,00,000
Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 5,00,000
Profit for the year 1,00,000
Add: Transfer to General Reserve 50,000
Dividend paid (Proposed Dividend for 2016–17)* during the Year 1,20,000
Provision for Tax 2,00,000
Net Profit before Tax and Extraordinary Items 4,70,000
Adjustment for Non-Cash and Non-Operating Items:
Depreciation on Fixed Assets 50,000
Interest on Debentures (10% of ` 2,00,000) 20,000
Interest on Bank Loan (10% of ` 1,00,000) 10,000 80,000
Operating Profit before Working Capital Changes 5,50,000
Change in Current Assets and Current Liabilities:
Decrease in Trade Receivables 80,000
Increase in Inventories (3,30,000)
Decrease in Creditors (50,000)
Increase in Bills Payable 1,00,000 (2,00,000)
Cash Generated from Operations 3,50,000
Less: Tax Paid (WN 1) 1,00,000
Cash Flow from Operating Activities 2,50,000
II. Cash Flow from Investing Activities
Fixed Assets Purchased (WN 2) (1,50,000)
Sale of Non-current Investments 50,000
Cash Used in Investing Activities (1,00,000)
III. Cash Flow from Financing Activities
Proceeds from Issue of Shares 2,50,000
Proceeds from Issue of 10% Debentures 2,00,000
Increase in Short-term Borrowings (Bank Loan) 50,000
Dividend Paid* (1,20,000)
Interest paid on Debentures (20,000)
Interest paid on Bank Loan (10,000)
Cash Flow from Financing Activities 3,50,000
IV. Net Increase in Cash and Cash Equivalents (I + II + III) 5,00,000
V. Cash and Cash Equivalents in the beginning of the year 5,00,000
VI. Cash and Cash Equivalents at the end of the year (IV + V) 10,00,000
* Proposed Dividend is the dividend proposed by the Board of Directors of the Company but it is paid only after it is approved, i.e.,
declared by the shareholders. In effect, declaration of final dividend is contingent on approval by the shareholders. As per Revised
Accounting Standard-4, Proposed Dividend should not be provided in the books of account but should be shown in the Notes
to Accounts. Proposed Dividend for the Current Year will be approved by the shareholders in the Next Year and thereafter it will be
paid. Whereas, Proposed Dividend for the previous year will be approved by the shareholders in the Current Year and will be paid
in the Current Year.