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Cash Flow Statement 5.15
2. Dr. PLANT AND MACHINERY ACCOUNT Cr.

Particulars ` Particulars `
To Balance b/d 4,00,000 By Bank A/c (Sale) 34,000
To Gain (Profit) on Sale of Plant A/c 10,000 By Accumulated Depreciation A/c 16,000
(Statement of Profit & Loss) (Depreciation on Plant Sold)
To Bank A/c (Bal. Fig., being Purchase) 6,40,000 By Balance c/d 10,00,000
10,50,000 10,50,000

3. Dr. ACCUMULATED DEPRECIATION ACCOUNT Cr.
Particulars ` Particulars `
To Plant and Machinery A/c 16,000 By Balance b/d 60,000
(Transfer of Depreciation on Plant Sold) By Depreciation (Bal. Fig.) 52,000
To Balance c/d 96,000 (Statement of Profit & Loss)
1,12,000 1,12,000

4. Dr. INVESTMENTS ACCOUNT Cr.

Particulars ` Particulars `
To Balance b/d 80,000 By Bank A/c (Sale) 28,000
To Gain (Profit) on Sale of Investment A/c 8,000 (` 20,000 + 40% of ` 20,000)
(Statement of Profit & Loss) By Balance c/d 90,000
To Bank A/c (Bal. Fig., being Purchase) 30,000
1,18,000 1,18,000

5. Interest on Debentures = (` 4,00,000 × 15/100) + (` 1,00,000 × 15/100 × 8/12) = ` 60,000 + ` 10,000 = ` 70,000.
6. Since dividend payment on preference shares has a priority over payment of interim dividend payment on equity
shares so payment of dividend on preference shares is implied.
Illustration 10. Prepare Cash Flow Statement on the basis of information given in the
Balance Sheet of Simco Ltd. as at 31st March, 2025:

BALANCE SHEET as at 31st March, 2025
Particulars Note No. 31st March, 31st March,
2025 (`) 2024 (`)

I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 1 1,00,000 80,000
(b) Reserves and Surplus 2 10,000 6,000
2. Non-Current Liabilities
Long-term Borrowings 3 14,000 12,000
3. Current Liabilities
(a) Trade Payables 22,000 24,000
(b) Short-term Provisions 4 8,400 6,000
Total 1,54,400 1,28,000