CHAPTER

CASH FLOW STATEMENT

Question 12.1Prepare cash flow statement for the year ended 31st March 2016 from the following balance sheets of KYC Ltd.

Particulars Note. No.

31.03.2016 31.03.2015

I. EQUITY AND LIABILITIESShare holders’ fundsa) Share capitalb) Reserve and surplusNon-Current liabilitiesLong term borrowings Current liabilities a) Short term borrowings b) Trade payablec) Short term provision

1

2

3

50,00,0005,00,000

10,00,000

5,00,0003,00,0002,00,000

37,00,0004,00,000

13,00,000

4,00,0003,00,0001,00,000

TOTAL 75,00,000 62,00,000II. ASSETSNon- Current assetsa) Fixed assets

i) Tangible ii) Intangible

b) Non- Current investments Current assetsa) Current investmentsb) Trade receivables c) Inventories d) Cash and cash equivalents

4 55,50,0001,00,0007,00,000

90,00050,000

6,00,0004,10,000

39,00,0001,20,0006,00,000

70,00040,000

8,70,0006,00,000

TOTAL 75,00,000 62,00,000Notes to accounts :

Particulars 31.03.2016 31.03.20151. Long term borrowings 10% Debentures 8% Loan from SFC

8,00,0002,00,000

12,00,0001,00,000

10,00,000 13,00,0002. Short term borrowingsBank overdraft Cash credit

3,00,0002,00,000

3,50,00050,000

5,00,000 4,00,0003. Short term provision

12

Proposed dividendProvision for tax

1,10,00090,000

70,00030,000

2,00,000 1,00,0004. Fixed assets

Tangible assets- BuildingIntangible assets - Goodwill

55,50,0001,00,000

39,00,0001,20,000

56,50,000 40,20,000Additional informations:

a) An unused Parking shed valued Rs. 1,00,000 was sold at a profit of Rs. 55,000b) Building costing Rs. 15,00,000 was purchased during the yearc) Interim dividend of Rs. 30,000 and tax paid during the year Rs. 25,000d) Interest on investments received Rs. 60,000

Question 12.2

Calculate net cash flows from operating activities:

31.3.15 31.3.16

Particulars Rs. Rs.

Profit and Loss Account 30,000 35,000

General Reserve 10,000 15,000

Provision for depreciation on plant 30,000 35,000

Outstanding expenses 5,000 3,000

Goodwill 20,000 10,000

Sundry debtors 40,000 35,000

An item of plant costing Rs. 20,000 having book value of Rs. 14,000 was sold for Rs.18,000 during 2015 – 2016.

Question 12.3 (SP 2017)

From the following particulars, calculate Cash Flow from Investing Activities: [4]

Assets Note. 31.03.2016 31.03.2015

No. (₹) (₹)

Non-Current Assets

(a) Fixed Assets

(i) Tangible 1 13,40,000 11,20,000

(ii) Intangible 2 4,60,000 4,80,000

(b) Non-Current Investments 3 2,60,000 1,60,000

Notes to Accounts:

Particulars 31.03.2016 31.03.2015

(₹) (₹)

1 Tangible Fixed Assets

Machinery 12,40,000 10,20,000

Land 1,00,000 1,00,000

13,40,000 11,20,000

2 Intangible Assets

Goodwill 2,00,000 1,00,000

Patents 2,60,000 3,80,000

4,60,000 4,80,000

3. Non- Current Investments

Shares of Finance Ltd. 2,60,000 1,60,000

Additional Information:

(i) Patents were written off to the extent of ₹ 40,000 and some patents were sold at aprofit of ₹ 20,000.

(ii) A Machine costing ₹ 1,40,000 (depreciation provided thereon ₹ 60,000 ) was soldfor ₹ 50,000.

(iii) Depreciation charged during the year on Plant and Machinery was ₹ 1,40,000.

(iv) Dividend received on shares ₹ 40,000.

Question 12.4 (SP2017)

From the following extracts of a company’s Balance Sheets, calculate Cash from Financing

Activities for the year ending 31st March, 2016:

Particulars 31.3.2016 31.3.2015

(₹) (₹)

Equity Share Capital 9,00,000 7,00,000

Securities Premium Reserve 1,25,000 1,00,000

12% Debentures 4,00,000 3,00,000

Proposed Dividend 60,000 70,000

Bank Overdraft 12,000 10,000

Additional information:

(i) Dividend proposed on Equity Shares ₹ 65,000.

(ii) Debentures were issued on 1st April, 2015, at a discount of 10%.

(iii) Unclaimed Dividend ₹ 7,000.

Question 12.5

The following Balance Sheets of Humility Ltd, Prepare its Cash Flow Statement for the year 2014- 2015. (as per AS 3)

ParticularsNote No. 2014-15 2013-14

I. EQUITY AND LIABILITIES Shareholders funds (a) Share capital 33,00,000 32,00,000(b) Reserve and surplus 1 5,00,000 4,00,000Non current liabilities Long term borrowing 2 16,00,000 15,00,000Current liabilities

(a) Trade payable 3,00,000 5,00,000(b) Short term provision 3 50,000 40,000

TOTAL 57,50,000 56,40,000 II ASSETS Non current assets (a) Fixed assets i) Tangible 4 39,50,000 34,60,000 ii) Intangible 50,000 40,000(b) Non current investments 6,00,000 6,00,000Current assets (a) Current investments 5 10,000 30,000(b) Trade receivable 50,000 40,000(c ) Inventories 6,00,000 8,00,000(d) Cash and cash equivalents 4,90,000 6,70,000

TOTAL 57,50,000 56,40,000

Notes to account: 2014-15 2013-141. Reserve and surplus General reserve 3,50,000 2,80,000Statement of P and L a/c 1,50,000 1,20,000 5,00,000 4,00,000 2. Long term Borrowings 10% Debentures 16,00,000 15,00,000 3. Short term provision Proposed dividend 20,000 13,000Provision for taxation 30,000 27,000 50,000 40,000 4. Fixed assets Tangible (Plant and Machinery 39,50,000 34,60,000Intangible - Goodwill 50,000 40,000 40,00,000 35,00,000 5. Current investments Marketable securities 10,000 30,000

Additional information:

i) The debentures were issued on 01.04.2014

ii) Machinery costing Rs. 70,000 (accumulated depreciation thereon Rs. 10,000 was sold for Rs. 45,000.

iii) Machinery costing Rs. 8,00,000 was purchased during the year

iv) Dividend of Rs. 11,000 was paid during the year.

(Ans:Cash flow from operating activities 5,36,000 Cash used in investing activities 7,65,000 Cash flow from financing activities 29,000

Hint: Marketable securities are part of cash and cash equivalents)

Question 12.6

Question 12.7

Prepare cash flow statementof Delhi Ltd.,as on 31/03/2016 from the following two balance sheets.

Particulars Note. No.

31.03.2015 31.03.2016

I. Equity and Liabilities

1.Shareholders’ Funds 1 6,00,000 12,40,000Reserves and Surplus 2 4,00,000 4,60,0002. Non- Current LiabilitiesLong Term Borrowings 3 7,70,000 3,80,0003. Non -Current LiabilitiesShort Term Borrowings 4 80,000 60,000Trades Payables 30,000 20,000Short Term Provisions 5 20,000 40,000

TOTAL 19,00,000 22,00,000II. Assets1. Non- Current AssetsFixed Assets 10,90,000 14,30,000Non- Current Investments 30,000 70,0002. Current AssetsShort-term Investments 1,80,000 2,60,000Inventories 2,40,000 2,40,000Trade Receivables 2,60,000 1,30,000Cash 80,000 40,000Other Current Assets 20,000 30,000

TOTAL 19,00,000 22,00,000

Notes1. Shareholders’ Funds

31.03.2015 31.03.2016Equity Share Capital 4,00,000 9,00,00010% Preference Share Capital 2,00,000 3,40,000total 6,00,000 12,40,000

2.Reserves and Surplus

31.03.2015 31.03.2016Balance of Statement of Profit & Loss Account 2,40,000 2,80,000General Reserve 1,60,000 1,80,000TOTAL 4,00,000 4,60,000

3.Long Term Borrowings

31.03.2015 31.03.201610% Debentures 7,70,000 3,80,000

4.Short Term Borrowings

31.03.2015 31.03.2016Bank overdraft 20,000 10,000Cash credit 60,000 50,000TOTAL 80,000 60,000

5.Short Term provisions

31.03.2015 31.03.2016Proposed dividend 12,000 25,000Provision for Tax 8,000 15,000

20,000 40,000

Additional Information:

(i) Depreciation charged on Fixed Assets Rs.1,90,000

.(ii) Tax paid during the year Rs.40,000.

(iii) Interim dividend paid during the year Rs.45,000.

(iv)Debentures are redeemed on 31st March, 2016

Question 12.8 (ISC 2013)

Prepare a cash flow statement from the following information.Arthur reported a profit of Rs 90,000/- for the year ended March 12, 2012 after considering the following :

a. Tax provided during the year 3,000b. Amortization of goodwill 12,000c. Profit on sale on land 5,000d. Writing of preliminary expenses – 2,000e. Machinery costing Rs 40,000/- (accumulated depreciation thereon being Rs 18,000/-)

was sold during the year at a loss of Rs 17,000/-.Extract of its balance sheet at the beginning and at the end of the year are given below.

01.04.2011 31.03.2012

Accounts receivable 16,000 20,000

Stock 15,000 12,000

Cash at bank 10,000 8,000

Accounts payable 11,000 9,000

Expenses payable 5,000 6,000

Provision for taxation 6,000 4,000

Investments (short term) 2,000 5,000

Plant and machinery (net value) 1,30,000 94,000

Proposed dividend 10,000 12,000

You are required to calculate Cash from Operating Activities as per Accounting Standards-3 (show your working clearly)

Question 12.9

Prepare cash flow statement of Terrace Infra Ltd.,as on 31/03/2014 from the following two balance sheets.

Particulars Note 31.03.2013 31.03.2014I. Equity and Liabilities1.Shareholders’ Funds 1 4,00,000 7,50,000

Reserves and Surplus 2 2,00,000 2,70,0002. Non- CurrentLiabilitiesLong Term Borrowings 3 3,50,000 3,80,0003. Current LiabilitiesShort Term Borrowings 4 80,000 40,000Trades Payables 37,000 20,000Short Term Provisions 5 33,000 40,000

TOTAL 11,00,000 15,00,000II. Assets1. Non- Current AssetsFixed Assets 4,90,000 8,30,000Non- Current 50,000 60,0002. Current AssetsShort-term Investments 80,000 2,90,000Inventories 2,50,000 2,30,000Trade Receivables 1,60,000 60,000Cash 60,000 25,000Other Current Assets 10,000 5,000

TOTAL 11,00,000 15,00,000

Notes 1. Shareholders’ Funds31.03.2013 31.03.2014

Equity Share Capital 3,00,000 6,00,000

Preference Share Capital 1,00,000 1,50,000total 4,00,000 7,50,000

2.Reserves and Surplus31.03.2013 31.03.2014

Balance of Statement ofProfit & Loss Account

1,60,000 2,10,000

General Reserve 40,000 60,000TOTAL 2,00,000 2,70,000

3. Long Term Borrowings31.03.2013 31.03.2014

10% Debentures 3,50,000 3,80,000

4.Short Term Borrowings31.03.2013 31.03.2014

Bank overdraft 60,000 30,000Cash credit 20,000 10,000TOTAL 80,000 40,000

5.Short Term provisions

Additional Information:(i) Depreciation charged on Fixed Assets Rs.90,000.(ii) Tax paid during the year Rs.30,000.(iii) Interim dividend paid during the year Rs.35,000.

Question 12.10

Ktd industries gives you the following information for the year ending 31st March 2016:

a) Net profit before tax Rs. 13,80,000

b) Closing inventory was higher than opening inventory by Rs. 43,000

c) Trade creditors on 31st March, 2016 exceeded those on 31st March 2015 by Rs. 23,000

d) Tax paid amounted to Rs. 7,00,000

31.03.2013 31.03.2014

Proposed dividend 15,000 30,000Provision for Tax 18,000 10,000

33,000 40,000

e) Depreciation charged for the year was Rs. 3,15,000. Outstanding expense on 31st March 2015 and 2016 totaled 82,000 and 91,000 respectively.

f. New machinery and furniture costing Rs. 10,27,500 in all were purchased

g) An issue was made of 20,000 equity shares of Rs. 25 each at a premium of Rs. 7.7 per share. The entire amount was received with application.

h) Dividends totaling Rs. 4,07,000 were paid.

i) Cash in hand and cash at bank as on 31st march 2015 totaled Rs. 2,13,800

ii) Company had investment worth Rs. 3,00,000 on 31st March 2015, whereas on 31st March 2016 it was 2,80,000. During the year investment costing 80,000 were sold at a profit of 20%.

You are required to prepare a cash flow statement as per AS-3 (Revised)

Question 12.11

Prepare cash flow statement from the following balance sheets.

Particulars Note. No. 31.03.2016 31.03.2015

EQUITY AND LIABILITIES 1. Shareholders fund a) Share capital 1,60,000 1,20,000b) Reserve and surplus 1 1,68,000 1,44,0002. Non current liabilities Long term borrowings 2 1,00,000 2,00,0003. Current liabilities a) Trade payable 96,000 88,000b) Short term provisions 3 56,000 40,000

TOTAL 5,80,000 5,92,000ASSETS 1. Non current assets a) Fixed assets : i) Tangible 4 3,24,000 3,84,000ii) Intangible 5 16,000 24,000b) Non current investments 24,000 16,0002. Current assets a) Inventories 96,000 80,000b) Trade receivables 1,12,000 83,200c) Cash and cash equivalents 8,000 4,800

TOTAL 5,80,000 5,92,000

Notes to Accounts 31.03.2016 31.03.2015

1 Reserve and surplus General reserve 64,000 48,000 Surplus. Ie, Balance P&L account 1,04,000 96,000 1,68,000 1,44,000

2 Long erm borrowings 8% Debenture 1,00,000 2,00,000

3 Short term provisions Provision for tax 24,000 16,000 Proposed dividend 32,000 24,000 56,000 40,000

4 Tangible assets Land and building 1,44,000 1,20,000 Plant and machinery 80,000 64,000 2,24,000 1,84,000

5 Intangible assets (Goodwill) 16,000 24,000Additional information:

1. Depreciation on plant and machinery Rs. 48,000 was charged during the year. During the year a plant, the cost which was Rs. 32,000 was sold for Rs. 24,000. The written down value of the plant was Rs. 16,000.

2. A piece of land was purchased in the year 2015-16 at Rs. 32,000 and depreciation of building Rs. 8,000 was charged during the year.

3. During the year dividend of Rs. 36,000 was paid and dividend Rs. 4,000 received on investments.

4. Tax paid during the year 2015-16 Rs. 28,000.

Question 12.12

From the following Balance Sheet of Computer India Ltd., prepare cash flow statement.

Particulars

Note No.

31.03.2016 31.03.2015

EQUITY AND LIABILITIES Sahreholders funds a) Share capital 40,000 32,000

b) Reserve and surplus 1 20,800 11,200Non current liabilities a) Long term borrowings (Loan) 9,600 16,000Current liabilities a) Trade payable 7,200 8,800b) Short term provision 2 34,400 21,600

TOTAL 1,12,000 1,12,000ASSETS Non current assets a) Fixed assets 60,000 48,000b) Investments 7,200 5,600Current assets a) Inventories 18,400 16,000b) Trade receivable 19,200 15,200c) Cash and cash equivalents 7,200 4,800

TOTAL 1,12,000 1,12,000

Notes to accounts:31.03.2016

31.03.2015

1. Reserve and surplus Security premium 4,000 ……General reserve 14,400 12,800Surplus ie, Balance in P and L account 2,400 (1,600) 20800 11,2002. Short term provisions Provision for taxation 18,400 9,600Proposed dividend 16,000 12,000 34,400 21,600

Other information:a) Depreciation charged during the year Rs. 8,000b) A fixed asset whose book value was Rs. 12,000, was sold for 14,400c) During the year income tax and dividend paid Rs. 11,200 and Rs. 12,000 respectively.d) Rs. 1,600 was paid as loan interest and Rs. 3,200 was received as interest on investments during the year.Prepare cash flow statement.

Question 12.13

The following is the balance sheet of DP consultants ltd, Prepare the cash flow statement as per AS -3 ( Revised)

Particulars Note

31.03.2015 31.03.2016

No.I. EQUITY AND LIABILITIES : 1. Share holders fund (a) Share capital (b) Reserves and surplus 2. Non current liabilities Long term borrowings (10% Debenture) 3. Current liabilities (a) Short term borrowing (Band overdraft ) (b) Trade payable (c ) Short term provision (Provision for tax)

12

5,00,0002,50,000

2,00,000

12,00015,00018,000

4,00,0001,10,000

1,25,000

11,00083,00011,000

TOTAL 9,95,000 7,40,000II. ASSETS : 1. Non current assets (a) Fixed assts (Tangible) (b) 10% non current investments 2. Current assets (a) Current investments (b) Trade receivable (c ) Cash and cash equivalents (d) Other current assets (Underwriting commission)

3

4

8,60,00050,000

14,00061,00010,000-------

6,10,00030,000

------80,00012,000

8,000TOTAL 9,95,000 7,40,000

Notes to accounts :1. Share capital Equity share capital 12% Preference share capital

3,50,0001,50,000

2,00,0002,00,000

5,00,000 4,00,0002. Reserve and surplus Statement of profit and loss General reserve

1,50,0001,00,000

1,00,00010,000

3. Fixed assets (Tangible ) Less: Accumulated depreciation

10,10,000(1,50,000)

7,10,000(1,00,000)

4. Cash and cash equivalents Cash in hand Cash at bank

8,0002,000

4,0008,000

10,000 12,000Additional information:i. Dividend paid Rs. 5,000ii. Fresh debentures were issued on 31st March 2015iii. Investments were purchased on 1st October 2014iii. Current investments includes Rs. 4,000 marketable securitiesPrepare cash flow statement of Ajmal ltd. from the following balance sheet.

Question 12.14

Prepare cash flow statement from the following balance sheets of Birla Ltd.

NOTES1. Reserve and surplusGeneral reserve 200 150Surplus ie, Balance in statement of profit and loss 100 60

300 2102. Fixed assets - TangibleBuilding 600 400Machinery 700 500

1,300 900Additional information:

1. Building still under construction and no depreciation was charged.

2. Depreciation was charged @ 25% on the opening value of Machinery.

3. An old machine costing Rs. 50,000 was sold for Rs. 35,000 (WDV Rs. 20,000)

4. Income tax paid during the year Rs. 50,000

Balance sheet Particulars Note

No.‘000

31.03.2016‘000

31.03.2015EQUITY AND LIABILITIES 1. Share holders fund a) Share capital 1,000 800b) Reserve and surplus 1 300 2102. Non current liabilities a) Long term borrowings (10% debentures ) 200 …..3. Current liabilities a) Trade payable 700 820b) Short term provisions (Provision for taxation) 300 170

TOTAL 2,500 2,000ASSETS 1. Non current assets a) Fixed assets- Tangible 2 1,300 900b) Investments 100 ….2. Current assets a) Inventories 400 200b) Trade receivables 500 700c) Cash and cash equivalents 200 200

TOTAL 2,500 2,000

5. Debentures were issued on 1st October 2015 at a discount of 10% and the amount of discount had written off to the statement of profit and loss account.

6. Dividend received on investments Rs. 8,000.

Prepare Cash flow statement as per AS-3.

Question 12.15 (ISC 2015)

You are required to prepare a cash flow statement (as per AS-3) for the year 2013-14 fromthe following Balance Sheets.

Particulars NoteNo.

31.03.2014₹

31.03.2013₹

I 1

2

3

EQUITY AND LIABILITIESShareholder’s funds(a) Share capital (Equity share capital)(b) Reserve and surplus (Statement of P&L)Non current liabilities(a) Long term borrowingCurrent liabilities(a) Short term borrowings (Bank loan)(b) Trade payable(c )Short term provisions 1

6,00,0002,00,000

1,00,000

---45,000

1,30,000

4,00,0001,00,000

2,00,000

10,00060,000

1,20,000TOTAL 10,75,000 8,90,000

II1.

2.

ASSETSNon current assetsa) Fixed assets(i) Tangible assets (Building) (ii) Intangible assets (Patents)b) Non current investmentsCurrent aasetsa) Inventoriesb) Trade receivables (Debtors)d) Cash and cash equivalents

6,00,00045,00075,000

15,0002,55,000

85,000

6,00,00050,000-------

10,0002,00,000

30,000

TOTAL 10,75,000 10,75,000

Notes to accounts:Particulars 31.03.2014

₹31.03.2013

₹1 Short term provisions

Proposed dividend Provision for taxation

60,00070,000

80,00040,000

Additional information:During the year 2013-14

(i) Building costing 75,000 was purchased.(ii) An old building, The book value of which was Rs. 63,000, was sold at loss of ₹ 5,000.(iii) Tax provided during this year was ₹ 80,000

Question 12.16 (ISC 2016)

You are required to prepare a cash flow statement (as per AS 3) for the year 2014-15 from the following balance sheets:

PARTICULARS NOTE NO. 31.03.2015

31.03.2014

I. EQUITY AND LIABILITIES 1. Shareholders’ funds

(a) Share capital (Equity share capital)(b) Reserve and surplus (Statement of P/L)

2. Non current liabilities (a) Long term borrowings (8% Debenture)

3. Current liabilities (a) Short term borrowings (Bank overdraft)(b) Trade payable (Creditors)(c) Short term provisions 1

3,00,0001,20,000

1,50,000

19,00031,000

1,30,000

2,00,00070,000

1,20,000

5,00020,000

1,20,000TOTAL 7,50,000 5,35,000

II. ASSETS1. Non current assets

(a) Fixed assetsTangible

(b) Non current investments2. Current assets

(a) Inventories (b) Trade receivable (c) Cash and bank balance

2

3

2,04,2001,30,000

1,41,50062,600

2,11,700

1,83,0001,20,000

1,25,00062,90044,100

TOTAL 7,50,000 5,35,000

Notes to accounts

PARTICULARS 31.03.2015 31.03.20141. Short term provisions

Proposed dividendProvision for taxation

50,00080,000

60,00060,000

1,30,000 1,20,0002. Fixed assets (Tangible)

Plant and machinery Less: Accumulated depreciation

2,43,000(38,800)

2,23,000(40,000)

2,04,200 1,83,000

3. Trade receivableDebtors Less: Provision for doubtful debts

64,600(2,000)

64,500(1,600)

62,600 62,900Additional information :

(i) A part of machine was sold for Rs. 21,000 at a profit of Rs. 4,000(ii) The company charged depreciation Rs. 3,000 on its plant and machinery.(iii) New debentures were issued on 31st December 2015 at a discount of 10%(iv) Interest of Rs. 9,600 was paid on debentures.

(Ans: Operating 1,23,400 ; Investing 11,000 ; Financing 57,400)

Question 12.17Given below is the extract from Balance sheets of ABC ltd.Particulars 31.03.2015 31.03.2016Building at cost 10,00,000 16,00,000Provision for depreciation 3,00,000 5,00,000

During the year a part of building costing 3,00,000 on which accumulated depreciation was 1,00,000 was sold for Rs. 2,50,000.

You are required to calculate:

a) Amount of building purchased b) Depreciation charged for the yearc) Profit/ loss on sale of buildingd) State how each of the items related to building will be shown in the cash flow

statement.