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Cash Flow Statement                                                           4.15
                     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, 2024:

                                                 BALANCE SHEET as at 31st March, 2024
                     Particulars                                            Note No.   31st March,   31st March,
                                                                                       2024 (`)   2023 (`)

                      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
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