Page 82 - AAAXII

Model Test Papers M.77

23. CASH FLOW STATEMENT
for the year ended 31st March, 2018
Particulars ` `
A. Cash Flow from Operating Activities
Net Profit before Tax and Extraordinary Items (WN 1) 1,37,500
Add: Non Cash and Non-operating Items:
Goodwill amortised 12,500
Depreciation on Machinery (WN 4) 27,500
Interest on Debentures (` 87,500 × 12/100) 10,500
Loss on Sale of Machinery 2,500
Operating Profit before Working Capital Changes 1,90,500
Less: Increase in Current Assets:
Inventories 12,500
Cash Generated from Operations 1,78,000
Less: Tax paid (WN 2) 21,250
Cash Flow from Operating Activities 1,56,750
B. Cash Flow from Investing Activities
Purchase of Machinery (WN 3) (1,75,000)
Proceeds from Sale of Machinery 7,500
Purcahse of Non-current Investments (12,500)
Cash Used in Investing Activities (1,80,000)
C. Cash Flow from Financing Activities
Proceeds from Issue of Shares 50,000
Proceeds from Issue of 12% Debentures 25,000
Interest on Debentures Paid (10,500)
Dividend Paid (60,000)
Bank Overdraft Raised 18,750
Cash Flow from Financing Activities 23,250
D. Net Increase/Decrease in Cash and Cash Equivalents (A + B + C) Nil
Add: Opening Balance of Cash and Cash Equivalents:
Current Investments 17,500
Cash and Cash Equivalents 10,750 28,250
E. Closing Balance of Cash and Cash Equivalents:
Current Investments 10,000
Cash and Cash Equivalents 18,250 28,250

Working Notes:
1. Calculation of Net Profit before Tax and Extraordinary Items: `
Net Profit as per Statement of Profit and Loss (` 62,500 – ` 25,000) 37,500
Add: Provision for Tax 40,000
Dividend Paid (Proposed Dividend for the year ended 31st March, 2017) 60,000
Net Profit before Tax and Extraordinary Items 1,37,500
2. Dr. PROVISION FOR TAX ACCOUNT Cr.
Particulars ` Particulars `
To Bank A/c (Tax Paid—Balancing Figure) 21,250 By Balance b/d 31,250
To Balance c/d 50,000 By Statement of Profit and Loss 40,000
(Provision Made)
71,250 71,250