ference shares Fi

tax 0
0
t of Ion term borrowin s Flnancin
eived O ratln Actlvl
to staff O eratin Activi
assets Investin Activl
Sale of investments Investin Activi
Sellin nd distribution ex enses O eratin Activi
Tradi commission received O eratin Activi
Classify the following into cash flows from: (i) Operating Activities (ii) Investing
Activities and (iii) Financing Activities while preparing a Cash Flow Statement.
(a) Interest paid; (Delhi Board/CBSE 2005 C)
(b) Interest received; (CBSE/Delhi Board 2006)
{c) Issue of Debentures; (Delhi Board 2005 C)
( d) Payment of Dividend; (Delhi Board 2006, 2005 C)
(e) Payment of Income Tax; (CBSE/Delhi Board 2005 C)
(f) Purchase of Equipment; (CBSE/Delhi Board 2005 C)
(g) Purchase of Fixed Assets; (Delhi Board 2006)
(h) Purchase of Machinery; (Delhi Board/CBSE 2005 C)
(i) Receipt of dividend; (CBSE 2006, Delhi Board 2006/2005 C)
{j) Redemption of debentures; (CBSE 2006)
(k) Redemption of preference shares; (Delhi Board 2006, 2005 C)
(I) Repayment of Long Term Loan; ( CBSE 2005 C)
(m) Sale of fixed assets; (CBSE/Delhi Board 2006)
(n) Sale of Land and Building; (Delhi Board 2005 C; CBSE 2005 C)
Ans: Cash flows from Operating Activities: (e)
Cash flows from Investing Activities: (b), (f), (g), (h), (i), (m), (n).
Cash flows from Financing Activities: (a), (c), (d), (j), (k), (I).
 e Period 12 000
lod of Good Wood eo., you are requlN!!CI
ltiOllal Information
3: 31.3.201: 31.3.201:

30,000 45,000
I 7,000 18,500
.
nd Surplus: Statement of Profit and LOSS
8,000 9,500
yables: Sundry Creditors 2500 4000
BIiis Payable 77,000
TOTAL 47,500
~
(l) Non-Current Assets:
F'ored Assets 20,000 49,000
(2) Cun-ant Assets:
Stock In hand 9,000 9,000
Debtors 12,000 10,000
tash In hand 6 500 9000
TOTAL 47 500 77 000
nal lnfonnation:
lilcorne tax paid during the year was , 4,500.
00 Dividends paid during the year was 12%. (CBSE 2011 C)
Solution:
CASH FLOW STATEMENT
Particulars
Cash Flows From Operating Activities:
Net Profit as per Statement of Profit and Loss (18,500 - 7,000)
'
11,500
'
Add: Income tax paid 4,500
Dividend paid (30,000 x 12%) 3 600
Net Profit before Tax 19,600
Adjustments for Non-operating / Non-cash items -
Operating Profit before Working Capital Changes 19,600
Decrease in Debtors
2,000
Inaease In Sundry Creditors
1,500
,:1 Inaease in BIiis Payable
1,500
cash Generated from Operations
Income Tax Paid 24,600
(4,500)
Net Cash from Operating Activities
ca. Flows from Investing Activities: 20,100
Purchase of Fixed Assets
j Net Cash used in Investing Activities (29,000)
(29,000)
 •• • • .,,..... ..-,1Jg111o11111 111.°'IYIU-i
eofShares 3,00,000
~fslng of Long-tenn Borrowings 2,00,000
Interest Paid on Long-term Borrowings 20 000
Net cash from Anancing Activities 4 80 000
Net Increase In Cash and Cash Equivalents 20,000
cash and Cash Equivalents at the Beginning of the Period 20 000
Cash and Cash E uivalents at the End of the eriod 40 000
Working Notes: (1) caladation of Fixed Assets Purchased:
Dr. FIXED ASSETS A C Cr.
To Balance b/d 3 oo ooo By Depreciation 1,49,000
, ' By Cash (Sale of machinery) 30,000
To cash (Purchase - Bal. fig.) 3 70 ooo By Balance c/d 5 00 000
6 70 000 . 6 70 000
Profit/Loss on sale of machinery= Sale Price - w.D.V. = 30,000 - (70,P00 - 40,000) = Nil .
From the following information, prepare a 'cash Flow Statement' of Balaji Ltd.:
Balance Sheets of Balaji Ltd.
.. ..
Asat 31 3 2012 a nd 31 3 2013
Partiallars 31.3.2012 31.3.2013
I. EQUITY AND LIABILITIES
f
(1) Shareholders' Funds:
(a) Share Capital (Equity Shares of, 10 each) 2,50,000 3,S0,000
'
(b) Reserves and Surplus: 31.3.ii01~ 31.3.2013
Securities Premium Reserve
Statement of Profit and Loss 40,000
- 25,000
{20,000)
(2) Non-Current Liabilities:
40,ooo s,ooo 40,000 5,000
Long-tenn Borrowings: 12% Debentures 60,000
I (3) Current Liabilities
1,50,000
1,00,000
1,25,000
Total 5,00,000 5,80,000
II. ASSETS
(1) Non-Current Assets:
(a) Fixed Assets
2,00,000 2,80,000
(b) Invesbnents
(1) Current Assets: 1,00,000 1,00,000
(a) Trade Receivables
(b) Cash and Cash Equivalents
1,S0,000 1,60,000
30,000 40,000
(c) Other Current Assets: Discount on Issue of Debentures
.. . Total
20,000
5,00,000
-
Addlttona/ Information: 5,80,000
(f) Debentures were issued on 1.4.2012.
(ii) During the year a machine included in Fixed Assets costing f 1,20,000 was purchased and another
machine of the book value off 30,000 was sold at a loss off 2,000. (CBSE 2012 C)
 -- • • "' A fEMEIIIT - 50LVeo EXAM111111.no111 9\IEST10Ns -
, _
,.,_
..
So_lUtlon: ~II FloW STATEMENT '
Cash Flaws Frorn olleratin Actlv1t1es,
Particulars
9
Adjustments
Net for:Statement of Profit and loss[(·) 20,000- 'I0,000]
Loss as Per
(60,000)
Interest on Debentures (1,00,000 x 12%)
Discount on Issue of Debentures Written off 12,000
Loss on Sate of Machine
Depreciation on Fixed Assets 20,000
2,000
Operating Loss before Working Capital Changes 10,000
Increase in Trade Receivables (16,000)
Decrease in Current liabilities (10,000)
Cash Lost in Operations 25,000
Income Tax Paid _ __ (51,000)
Net Cash used in 0Perating A"!'•~•'.•es.
Cash Flows from Investing Act1v1t1es. (51,000)
Sale of Machine .
Purchase of Machine . .. 28,000
Net Cash used in_Inves~ng ~~~:~,
1,20,000
(92,000)
Cash Flows fro_m F1nanc1ng
Issue of Equity ~hares
1,00,000
Securities Premium 25,000
Issue of D~bentu~~~entures 40,000
12,000
Interest Paid o~ ancing Activities
1,53,000
Net Cash 1 :rom
~nand Cash Equivalents of the Period 10,000
30,000
Net lncrear ~ ~;iivalents at the :e~,~~•:e oeriod
cash
cash and ash Equivalents at the n
and Cas 40,000
Working Note: Calculation of amount of depreciation charged on fixed assets:
FIXED ASSETS A/ C
2,00,000 By Cash (Sale of Machine) 1 28,000
To Balance b/d I
2,000
To Cash (Purchase of Machine) 1,20,000 By Statement of Profit and Loss
(Loss on Sa\e)
By Depreciation (Balancing figure) 10,000
By Balance c/ d 2,80,000
3,20,000 3,20,000
st
from the following Balance Sheets of Usha Kaai Ltd. as at March 31 and the additional infonnatl4
~ _ ..,...i...to,t _ nreoare Cash Flow Statement t ·u -:a. -,n1, \ '.31.3.201~
 ng Note: Cale ~s dl lhe fld n,n Of th P1.. lad
Ulation of of U1 ri0<1
To Balan •rnount of d
To Ca h ce b/d Fl ~prt,datl on charged on fi1ted asiels:
s (Purchase Of lCEO ASSETS ALC
Machine) ,00 000 By ( h { ol of M t , ) 2
l ,l0,000 By 5wkm nt of Pr f t 2,000
( r
By Dcp,c 1olloo (8 I.rm II gr, ur ) 0,000
From .-.___ r--~-- By Bolance c/d 2 80 000
Provldect Dti=in g Balance Sh 3.20.000 ~ - -~~=~ 3.20.000
'• re Cash Flow ~eetts of Usha Kaai Ltd. as at March ii tt' and the add,uon al informa tion
~,a ement:
'---

I EQUrry ANO LIA& Particula rs 31.3201 2 31 3.2011

, ,
•
1. Shareholders• IlnlEs
(a) Sha Funds:
re Capital:
:u.:J.2012 :Jl.:J,2Ql1
• Equity Share Capital
(b) ~ S%_Pre ference Share Capital
'
6,00,000
3,00,000
'
6,00,000
4.00,000 9,00,000 10,00,0 00
~ n s and Surplus:
• General Reserve 1,45,000 85,000
• 5tatement of Profit and Loss 3,00,000 (1,00.000) 4,45,00 0 {15,000 }
2. Non-CU nent liabilitie s:
long-te rm Borrowings: 8% Debentures 3,00,000 2,00,00 0
l. Current Liabtlities 1.00.00 0 1.00.00 0
TOTAL 17.45.0 00 12.85.0 00
II. ASSETS
1. Non-Cunent Assets:
(a) Axed Assets:
(i) Tangibl e Assets (Net) 9,60,00 0 7,20,00 0
(ii) Intangible Assets: Goodwill 10,000 15,000
(b) Non-cu rrent Investm ents 1,75,00 0 1,10,00 0
2. Current Assets:
Trade Receiva bles 6,00.00 0 4,40,00 0
TOTAL 17.45,0 00 12,85.0 00
Additional Information:
(a) Depreciation provided on tangible fixed assets, 90,000. st
(b) Preference shares were redeemed at a premium of 100/o on 31 March, 2012.
550
(4,800)
Interest paid on Debentures 5 000
Increase in Bank Overdraft
Net Cash from Financing Activities
Net Increase in Cash and Cash Equivalents _
Cash and Cash Equivalents at the beginning of the penod
Cash and Cash Equivalents at the end of .the period
Working Notes:
(1) Calculation of Net Profit before Tax:
9,840
Change 1n Surplus ,.e. Balance in Statement of Profit and Loss
3,600
Add: Transfer to General Reserve . W. k.. '9 Note 2) 13,200
Add: Provision for Income Tax made during the year 2017-18 (See or, m
Net Profit before Tax .
(2) Calculation of Provision for Income Tax made during the year 2
Dr. Provision for Income Tax Account
Ol7-18'
• - 26,640

Cr.
Particulars
To Bank A/c {Tax paid during the year)
To Balance c/d
~
14,400 By Balance b/d
Particulars

16,800 By Surplus A/c (Provision made - Bal. fig.)

18,000
13,200
'
31,200 31,200
(3) Calculation of Plant & Machinery purchased during the year 2017-18:
Dr Plant and Machinery Account Cr.
Particulars ~ Particulars
To Balance b/d
To Bank Ne (Purchase - Bal. fig.)
34,800 By Depreciation A/c
2,400 By Balance c/d
14,400
22,800
'
37,200 37,200
~ Fmm the follow;ng Balana, Sheet of JV Ltd. as at 31.3.2019, prepa,e a cash Flow Statement:
Particulars Note No. 31.3.2019
I. EQUITY AND LIABIUTIES 31.3.2018
(1) Shareholders' Funds:
(a) Share Capital
" '
s,00,000 5,00,000
(b) Reserves and Surplus
(2) Non-Current Liabilities:
1 1,00,000 (25,000)
Long-Term Borrowings
2 2,50,000 1,50,000
(3) Current Liabilities:
(a) Short-Term Borrowings
3 1,50,000
(b) Short-Term Provisions 1,00,000
4 1,25,000
TOTAL 75,000
n. ASSETS 11,25,000 8,00,000
(1) Non-Current Assets:
(a) Fixed Assets: Tangible
{2) Current Assets: 5 6,00,000 4,50,000
{a) Trade Receivables
(b) Cash and Cash Equivalents 2,75,000 2,25,000
(c) Short-term Loans and Advances so,ooo 25,000
TOTAL 2,00.000 1,00.000
Notes to Accounts: 11,25,000 8,00,000
Note No.
Particulars
1. Reserves and Surplus: 31.3.2019 31.3.2018
Surplus i.e. Balance in the Statement of Profit and Loss
2.
3.
Long-Tenn Borrowings: 10% Debentures 1,00,000 " f
(25,000)
Short-Term Borrowings: Bank Overdraft 2,so,000
4.
1,50,000
Short-Term Provisions: Provision for Tax 1,so,000
s. 1,00,000
Tangible Assets: 1,25,ooo
Machinery 75,000
Accumulated Depreciation 7,37,500 5 I 25I 000
(1,37,SOO) ( 7S,OOO
Note: Proposed dividend for the years ended 31st March 2019 d 6,00,000 4 so 000
. ly•
50,000 respective , an 31st Ma...... 2 , ,
• ...,, 018 are , 75,000 and ~
Additional Information: f 1,00,000, 10% Debentures were issued
on 31.3,2019.
(C8SE 2018, modlffad1.
~ A.OW STATEMENT SOlVED EXAMINATION QUESTIONS
~tl'1
~ "'
CASH FLOW STATEMENT

(A) cash Flows Flom O ti Pa~~ 3,00,000

Net Profit before Tax ...,. ng Activities:
Adjustments
Interest for non-o,peraong and non-cash ,cems: 15.000
Depreo on Debentures (1,S0,000 ,. 100/o)
62.500
ation on Machmery 3,77,500
Operating Profit before Worklng capctal Chan es cso.OOo)
lnaease in Trade Receivables g 3,27,500
<75 QOO)
cash Generated rrom Operations 2,s2,soo
Income Tax Paid
Net cash from Operating Acuv1t1es
(2,12,sOO)
(B) ,c ash Flows from Investing Activities:
Purchase of Machinery
Loans al'd Advances G1Ven (Increase in Short-term Loans and Advances)
,1 .oo.OOO' (3,12,500)

Net Cash used in Investing Activities

1,00.000
(C) Cash Flows from Financing Activities: (15,000)
Issue of 10% Debentures so,ooo
Interest paid on Debentures ,so.000\
Increase in Bank Overdraft ·1 ss.ooo
Payment of Proposed Dividend (previous year) 25 ooo
Net Cash from Finanong Act:ivibes
I 2s.ooo
Net Increase in cash and Cash Equivalents [(A) + (B) + (C})
J

I so.ooo
cash and Cash Equivalents at \11e Beginning of \11e Penod
cash and Cash Eau1valents at tt,e End of the =noel
1,25,000
Working Note:
calculation ofSurplus
Net Profit before in
Tax: so,ooo
Change in i.e. Balance tt,e Statement of Profit and LOSS [1,00,000 - {-) 25,000} 1.2s.ooo
Add: Proposed Dividend (previous year) ~.00 000.
Add: Provision for Tax (current year)
Net
,,om Profit
the ~fore Tax
fotlow;ng Balance Sheet of Klem Ud. and th• additional lnfom>ation as on 31.3.2019, P-""'
31.3.2019 31.3,2018
Note No,
40. a cash flow Statement·
Particular.. " '
~ L1AQ1LITIF.S. 5,80,000
1. g,QU1JY &NP
(1) Shareholders' funds:
7,90,000
4,60,000 1,20,000
1
(a) Shitl'C Cnpltal
(b) Reserves and surplus s,00,000 3,00,000
2
Non-Current Llabll\Ucs:
(2) Long-Term Borrowings
3 1,1s,ooo 42,000
current Unblllttcs: _ __!t.1_!&00 46,000
(3) (a) St,ort-Tcrm Bom>wlngs 4
____19,83,000 10 88 000
(b) Short-Term provl5lons
TOTAL

ll, ASSE.1'S.
(l) Non-current Assets: 9,80,000 6,35,000
5
fi,ced ~ets 2,68,000 1,70,000
6
(I) Tangible Assets
(ii) 1ntJtnglble ASSets 1,40,000 70,000
current ASSets: 4,40,000 1,50,000
(2) (a) oun-ent investments
155.000 63,000
(b)Trftde Receivable$ 10,88.000
(c) cash and east, Equtvalents 19.83.000
TOTAL
3L3.2019 31.3.2018
,-aoteS to Aceounts: Particulars
•
Not1! No. R ~ and surp4us:
· su,ptus (Balance in the sutement of Profit and Loss)
3,20,000
0000
' 60,000
60000
'
1
c;eneral Reserve 120000
300000
2- Ternt Debentures 4 000
3- T-"! Overdnft 000 46000
._ ~T~ forTax
1-.::::--.,___-
 552 FINAL·TOUCH TO A

s. Tangible Assets: I I I I I
Plant and Madlinery I I I I
Less: Accumulated Depreciation : I I II

2,68 000 1
6. lntan ible Assets: Goodwill . d n st september, 2018, (Delh
Additional lnfonnation: 120/o Debentures were issue 0 1
Solution: CASH FLOW STATEMENT
Details f!l Amount ft) -
Particulars
(A) Cash Flows From Operating Activities:
Net Profit before Tax 4,58,000
Adjustments for non•operating and non-cash items:
Interest on Debentures (3,00,000 x 12% + 2,00,000 x 12%x 7/1 2) 50,000
Depreciation on Plant and Machinery 5 000
Operating Profit before. Working Capital Changes 5,13,000
Increase in Trade Receivables /2.90,000)
Cash Generated from Operations 2,23,000
Income Tax Paid (46 0001
Net Cash from Operating Activities 1,n,000
(8) Cash Flows from Investing Activities:
Purchase of Plant and Machinery (3,50,000)
Purchase of Goodwill /98,000)
Net Cash used in Investing Activitles
(4,48,000)
(C) Cash Flows from Financing Activities:
Issue of Shares
2,10,000
Issue of 12% Debentures
2,00,000
Interest paid on Debentures
(50,000)
Increase in Bank Overdraft
73,000
Net Cash from Financing Activities
433,000
Net Increase in Cash and Cash Equivalents ((A}+ (B) + (C)J
1,62,000
Cash and Cash Equivalents at the Beginning of the Period (70,000 + 63,000}
1,33 000
Cash and Cash Eoulvalents at the End of the ""riod 1140 000 + 1 55.000)
Working Note: 2 95 000
Calculation of Net Profit before Tax:
Change in Surplus i.e. Balance in the Statement of Profit and Loss (3,20,000 - 60,000)
Add:Transfer to General Reserve 2,60,000
Add: Provision for Tax (current year) 80,000
Net Profit before Tax 1,18,000
4,58 000
41 From the following Balance Sheet of Mayur ltd. and the additional information as at 31st March, 2018,
prepare a Cash Ftow Statement:
Mayur Ltd.
Particulars •
Balance Sheet as at 31st M rch 2018
"'
Note No.
EQUITY AND UABILIDES: 31,3,2018 (f) 31.3.2017 (f)
1. Shareholders' Funds:
(a) Share Capital
(b) Reserves and Surplus 3D,00,000 20,00,000
2. Non-Current liabilities: 1 3,00,000 4,00,D00
Long-term Borrowings
3. Current Liabilities : 2
4,00,DOO 3,00,000
(a) Trade Payables
(b) Short-term Provisions 1,70,000
3 2,50,000
Total 76000 64,000
ASSETS:
39 46.000 30.14 000
1. Non-Current Assets:
Fixed Assets:
(i) Tangible
(II) Intangible 4 29,00,000 23,00,000
2. Current Assets: 5
2,70,000 1,60,000
(a) Inventories
(b) Trade Receivables
2,20,000 2,30,000
(c1 Cash and cash Eautvalents
1,10,000 1,30,000
Total 4,46 000 1-94 000
39 46.000 30.14000
 r- ..1_-

~SH A.OW STATEMENT- SOLVED EXAMINATION QUESTIONS

Notes to Accounts:
31.3.2017 {~)
Note No. Particulars 31.3.2018 ,,,
1. Reserves and Surplus: 4.0Q.OOo_
Surplus (Balance in statement of Profit and Loss) 3 00.000 4.00.oc,_G_
3.00,000
2. Long-term Borrowings: 3.00~
9% debentures 4,00000 3 oo.OOQ
4 00.000
3. Short-term Provisions: 64.000_
Provision for Tax 76000 64,000_
76,000
4. Tangible Assets: 28,00,000
Machinery 36,00,000 ,s.oo.0001
(7 00 000)
Accumulated Depreciation 23 00.000
29.00,000
s. Intangible Assets: 2,70 ooo
1.60.000
Goodwill 1.60.000
2.10 ooo

Additional Information: . 1 ted depreciation was '

(i) During the year, a piece of machinery costing f 4,00,000 on which accumu a
73,000 was sold for, 3,10,000. (CBSE 2019)
(ii) 90/o Debentures off 1,00,000 were issued on 31"' March, 2018.
Solution: CASH FLOW STATEMENT
Particulars
Details c,, Amount(')

(A) Cash Flows From Operating Activities: (24,000)

Net Profit/ (Loss) before Tax .
Adjustments for non-operating and non-cash items: 27,000
Interest on Debentures (3,00,000 x 9%) 2,73,000
Depreciation on Machinery 17 000
Loss on Sale of Machinery 2,93,000
Operating Profit before Working capital Changes (80,000)
Decrease in Trade Payables 10,000
Decrease in Inventories 20 000
Decrease in Trade Receivables 2,43,000
cash Generated from Operations (64 000)
Income Tax Paid .. 1,79,000
Net cash from operating Activities . • .
(B) cash Flows from Investing Act1v1t1es: 3,10,000
Sale of Machinery (12,00,000)
Purchase of Machinery (1 10 000)
Purchase of Goodwill . .. (10,00,000)
h ed in Investing Activ1t1es
Net cas us f m Financing ActiVI · ·t·,es.·
( C) Cash Flows ro 10,00,000
Issue of Shares 1,00,000
Issue of 9% Debentures (27 000)
Interest paid on Debe_ntu~ivitles 10 73.000
P Net Cash from Finan~1~sh Equivalents ((A) + (B) + {C)) 2,52,000
~ Net Increase in Cash an t the Beginning of the Period 194 000
-, £ cash and cash Equivalents at the End of the nPriod 4,46,000
cash and cash Fou1valents a
working Notes, profit before Tax:
(l) Calculation of Ne~e Balance ,n Statement of Profit and Loss (1,00,000)
Change'"· ~urp!us Ta~ (current year) 76,000
Add: Prov1s1on ,or re Tax (24,000)
Net Profit/ (Loss) bef? purchased during the year:
ca leulation of madunerv MACHINERY ACCOUNT Cr.
(2)
Dr. particulars ' Part,culars
28,00,000 By Bank A/c (Sale of machinery)
12,00,000 By Accumulated Depredation Ne
3,10,000 '
To Balance b/d t,ased - Bal. fig.} 73,000
To Bank A/c (f'U(C By Loss on sale of maChtnery 17,000
By Balance c/d 36 00.000
40 00 000 40.00.000
~S4 FINAL•TOUCH TO ACCOUNT
(3) Cakulatfon or depredation charged during the year:
Dr ACCUMULATED DEPRECIATION ACCOUNT C
Particulars t
To Machinery A/c Particulars
73,000 By Balance b/d '·
To Balance c/d

.
7 00 000 By P & L A/C (Dep. chargedclurmg the year-8.F)
7,73,000
5,00,00()
2 7190()
'
Following 1s the Balance Sheet of Solar Power ltd, as at 31.3.2014: 7.?tOOo
Solar Power Ltd.
Balance Sheet
,. EQuny ANP LIABILIDES
Particulars Note
No.
31.3.2014
f
31,3,2013
(1) Shareholders' Funds:
(a) Share Capl!al
(b) Reserves and Surplus
'
24,00,000 22,00,000
(2) Non-Current liabilities: 1 6,00,000
long-Term Borrowings 4,oo,ooo
(3) Current liabilities:
4,80,000 l,40,ooo
(a) Trade Payables
(b) Short-Term Provisions 3,58,000 4,os,ooo
TOTAL 1,00 ooo 1 54 ooo
II. 11:i,li~~
39,38 000 35,02 ooo
(1) Non-Current Assets:
(a) Fixed Assets:
(i) Tangible
(ii) Intangible 2 21,40,000
(2) Current Assets: 3 11,00,000
(a) Current Investments 80,000 2,24,000
(b) Inventories
(c) Trade Receivables
4,80,000 J,00,000
(d) Cash and Cash Equivalents 2,58,000 2,42,000
3,40,000 2,86,000
TOTAL 6.40 000
Notes to Accounts 7,50 000
s. No.
39 38,000 35 02,000
Particulars As on 31.3.2014
1. As on 31,3,2013
Reserves and Surplus:

2. Sumlus (Balance in Statement of Profit and Loss)

Tangible Assets: 6 00.000
' '
Machinery 4,00.000
Less: Accumulated Oeoreciation 25,40,000
3. Intangible Assets: 20,00,000
(4,00 000\ (300,000)
.. GoodwiU
.
Additional Information. 80 0002 24 000
~'-.o/Y
During !he year a piece of machinery costing f 48,000 on Which accumulated depreciation was f 32,000
:I
'\I \',
was sold for f 12,000. '\,
Prepare Cash Flow S!atement. (CBSE 2015) I
Solution:
CASH FlOW STATEMENT
Particulars
(A) Cash Flows From Operating Activities: Details i<J
Net Profit before Tax Amount (t)
Adjustments for non-operating and non-cash items: 2,00,000
Depreciation on Madifnery
Amortization of Goodwill l,32,000
Loss on Sale of Machinery 1,44,000
Operating Profit before Working Capital Changes 4 000
Decrease in Trade Payables 4,80,000
Decrease in ShorNerm Provisions (50,000)
Increase In Inventor/es (54,000)
Increase m Trade Receivables (16,000)
Cash Generated From Operations (54 000)
Income Tax Paid 3,06,000
Net Casf1 from Operating Activities .
J,06,000
L
 556 FINAL-TOUCH TOA

940000 S
4,
Preparethe
During
lnta119!ble Assets:
::;.:i..
Statement
a year a piece aftercosting
of machinery ta~ing l~::i, •:0:: 1
owing adjustment:
!,';,~::~ccumulated depreclatio~;.:i'

was sold for f 9,000,

Solution: CASH FLOW STATEMENT

Particular!. Details '

(A) Cash Flows From Operating Activities:
Net Profit before Tax . . 5,40,000
Adjustments for 11011-operatmg and non·cash ,tems.
Ocprectatlon on Machinery
1,30,000
Loss on Sale or Machinery
I 000
Operating Profit before Working (apltat Changes
Decrease In Trade Payables 6,71,000
Increase m Inventories (1,00,000)
Cash Generated from Oper.atlons 180 000
Income Tax Paid 3,91,000
Net Cash from Operating ActMtlc, I 20 000
(B) Cash Flows from Investing Activities: 2.71,000
Sale of Machinery
Purchase or Machinery 9,000
Purchase of Goodwill (9,40,000)
Net c.ash used in lnvestmg Act1v1t~ 4 00 000
{C) Cash Flows from Financing Activities;
Issue of Shares (13,31,000)
long-tem1 Borrowings
I0,00,000
Net Cash from Financing ActiVlties 2 00 000
Net Increase in cash and Cash Equivalents [(A) + (B) + {C)]
Cash and Cash Equivalents at the Beginning of the Period
12 00 000
Cast, and Cash E uivalents at the End of the rlod 1,40,000
Working Nohs: 2 40 000
(1) Calculation of Net Profit before Tax: 3 80 000
Olange in Surplus (i.e. Balance in Statement of Profit and loss}
Add: Provision for Taxation made during the year 2014-15
Net Profit before Tax 4,00,000
(2) Calculation of machinery purchased during the year: 1,40,000
5. 40,000
Dr. Particulars MACHINERY ACCOUNT
To Balance b/d
To Bank A/c (Purchased - Bal. fig.) 33,00,000' Particulars Cr.
9,40,000 By Bank A/c (Sale of machinery)
By Accumulated Depreciation A/c
By loss on sale of machinery
9,000
30,000
'
By Balance c/d 1,000
42 40 000
(3) Calculation of depreciation charged during the
Dr. 42 00 000
Vear: 42 40 000
Particulars ACCUMULATED DEPRECIATION ACCOUNT
To Machinery A/c
To Balance c/d 30,000' By Balance b/d
Particulars Cr.

44. Fol
4 00 000
4 30 oooBy P & L A/c (Dep. charged during /lie ,ear-B.F.) 3,00,000
I JO 000
'
low,n"'- IS the Balance Sheet of Akash ltd as at 31st M rch 2016
. a 4 30 000
Particulars - :
EQUITY AND LIABILITIES Note 31.3.2016
No, 31.3.2015
(1) Shareholders' Funds: ...l\'./.
(a) Share Capita! .J,!,
(b) fleserves and Surplus
(2)
Non-Current Lfabflltles: 1s,oo,ooo 14,00,000
(a) Long 're.rm Borrowings I 2,50,000
(3) Current Liabilities: 1,10,000
(a) Short-term Borrowings 2,00,000
{b) Trade Payables 1,25,000
~ Short-term Provisions 2
12,000 10,000
TOTAL 1s,000 83,000
3 18000
1995000 17 ~
 (1)~
(a) Fixed,..::-
(1) Tangible AISets
(A) Intangible • - - 4
(2) Current Assets· ~
5
(a) Cun-ent l~estmen
(b) Inventories ts 8,000
(c) Trade Receivables 37,000
d Cash • nd Cash E uiva1ents 26,000
14000
TOTAL
Notes to Accounts·
Note
. 19,95,000

No. 31-3-2016 31-3-2015

Partia.lars m
1. (f)
Reserves and Surplus:
Surpl C
2. h us i.e. Balance in Statement of Profit and Loss) 2,50,000 1,10.000
S ort-term Bom>wings:
Bank Overdraft: 10.000
3. 12,000
Short-term Provisions:
Provision for Tax 18,000 11,000
4. Tangible Assets:
Machinery 20,00,000 17,00,000
Accumulated Depreciation (1,40,000) (90.000)
s. Intangible Assets:
.. Patents .
Additional Information:
50,000 30,000

(i) Tax paid during the year amounted to, 16,000.

(ii) Machine with a net book value off 10,000 (Aa:umulated Depreciation , 40,000) was sold for f 2,000.
Prepare cash Flow Statement. (CBSE Sample Paper 2016-17)
Solution:
CASH FLOW STATEMENT
Particulars Details(') Amount (it)
(A) cash Flows From Operating Activities:
Net Profit before Tax (See Working Note 2) 1,63,000
Adjustments for non-operating and non-cash items:
Depreciation on Machinery (See Workmg Note 4) 90,000
Loss on Sale of Machinery 8,000
Operating Profit before Working Capital Changes 2,61,000
Decrease in Trade Payables (68,000)
Decrease in Inventories 22,000
Increase 1n Trade Receivables (3,000)
cash Generated from Operations 2,12,000
0 Income Tax Paid (16,000)
d Net cash from Operating A~vities. • . 1,96,000
) (B) cash Flows from Investing Act1vit1es:
Sale of Machinery 2,000
Purchase of Machinery (See Working Note 3) (3,50,000)
Purchase of Patents _ _. (20,000)
Net cash used in Investing Activities (3,68,000)
(C) cash Flows trom Financing Activities:
Proceeds from Issue of Shares . 1,00,000
Proceeds from Long Term Borrowings 75,000
Increase in Bank 0ver:draft .. 2,000
sh from Finanong Activities 1,77,000
Net ca . cash and cash Equivalents [(A) + (B) + (C))
5,000
Net Increa~ Equivalents at the beginning of the period (12,000 + 5,000)
nd 17,000
cash a h Equivalents at the end of the period (14,000 + 8,000)
cash and eas . 22.000
World~~tfo~ of provision for tax made during the year:
(J.)01-
 FINAL-TOUCf'f JU"'-"-

558 .v 11ccouNT
pRO~ION fOR T,.,, Particulars
t
Dr. 16,000 By Balance bi~f profit and LOSS (PrOvisiOn
Particulars
By statemen Ao durin'9 the year - Bal. fig.)
To Bank (Tax paid during the year) fortaxmau~
18 ooo
To Balance c/d 34 ooo
(2) calculation of Net Profit before Tax: f profit and Loss (2,50,000 - 1, 10,000)
0
Change in Surplus 1,e. Balance l~ Statement ('5ee Working Note 1)
Add: Prov1s,on for Tax made dunng the year
Net Profit 1.Jefore Tax d • the year: Cr.
(3) Calculation of machinerf purchased made NuErRmYgACCOUNT
Dr
Particulars
MACHI
t
17,00,000
By Bank A/C (Sale)
Particulars

By Accumulated Dep. Ne (Dep. on machine sold)

2,000
40,000
'
To Balance b/d 3,50,000 8,000
To Bank Ale (Purchase) (Bal fig.) By Statement of Profit and Loss (Loss)
20 00 000
By Balance c/d 20 50 000
20 so.ODO
(4) CafcL1latron of depreciation charged during the year: Cr.
ECIA110N ACCOUNT
ACCUMULATED DEPR Particulars l
Dr. t
Particulars 90,000
40,000 By Balance b/d
To Machinery Ajc (Dep. on machine ~Jd) By Statement of ProFit and LOSS (Bal. fig.) 90 000
)40 000 1 80 000
To Balance c/d
l 80 000
Following was the Balance Sheet of M.M. Ltd, as at 31,3,2016:
. .
Balance Shee t o f M M Ltd .as a t 31 3 2016 ..
31.3.2016 31.3.2015
Note
f
Particulars

I. ~QUITY Atl[l bIA~ILIDES

No.
'
(1) Shareholders' Funds:
(a) Share capital s,00,000 4,00,000
(b) Reserves and Surplus 1 2,D0,000 (50,000)
(2) Non-current Liabilities:
Long-Term Borrowings 2 4,50,000 5,00,000
(3) Current liabilities:
(a) Short-Term Borrowings 3 1,50,000 50,000
(b) Short-Term Provisions 4 70.000 90000
TOTAL 13 70 000 9 90 000
II. ASSETS
(1) Non-Current Assets:
(a) Fixed Assets:
(i) Tangible 5 10,03,000 7,20,000
(ii) Intangible
6 20,000 30,000
(b) Non-Current Investments
(2) Current Assets: 1,00,000 75,000
(a) Current Investments
(b) Inventories 50,0DO 60,000
7 1,07,000 45,000
(c) Cash and Cash Equivalents
TOTAL 90 ODO 60-000
Notes to Accounts 13-70 ODO 9.90.000
Note
No. Particulars 31.3.2016 31.3.2015
1. Reserve:- and Surplus: ~ f
Surplus i.e. Balance in Stat
ement of Profit and Loss
2 00 000 50000
2. Long-Term Borrowings· 2 00 000 50000
l2% Debentures ·
4 so 000 5 00000
3, Short-Term Borrowings· 4 50 000 5 00 000
Bank Overdraft •
150 000 50000
4. Sho~·.Terrn Provisions; 1 so 000 50000
Prov1s1on for Tax
70000 90000
70 000 90000
 ,. 1n,,.__
st0Ck1nr,-
-:---.~1
AddltJon.1 ln'°"'1Mfo,,
Cl) U%0ebe,,t
(II) ta,c ' ?o,ooa':,!
were •.__. an l U 11
Prec>tre C._1J, ftow ~'Id during th. y.,
Solution: leffifflt.
C&
(911
•
(A) Calh flbw1 ftnm
f,
A

Ci,
In
N
(G)
p
N
(q ~-
R
lnharnt
1ncre , Bili 0.
Iii.. cmti ~ F. :-q Artv es
Net lncrc3SE" cash :!'ld (ash EQu valents ((A) + (B) + ~
Cash ..,_nd (.ash 6qu a !.> at the begmn,rg o tile penOd (60
cash al'ld cast) \-als'ts a: the end or the 90 ooo
Working Not-es: (1) (.alculation of provision for tax made dunng ~ ru,-,
----
Or. PROVISION fOR TAX Accot.fh'T
Pa-tC\Jle~s ' -=--
To Bank (Tax patd dir 1\9 the year) 70,000 By
By

ITo Balance c{d

(2) calwlatlon of Net Profit lbefore Tax:

.
1 11
70 :
1 1

Qlanoe m Surpl.is 1.e. Balance n St.Jtemer.• of Pre •"I.

Add· PrOViS...IOn 'or Ta,: made du 1l9 the ye;.
,~a Pratt before iDX
~ m the following Balance Sheet of SRS Uxt. and the add1tiol\l1 '""'"'.-
.._.........~,
46,
h flow Statemen_!: - - - - ~~ -

1.ovin AND LIABILITIES- -

-
Partlcula1"5 N 't N
I
• (l) SNreholders' Funds:
(a) Share Clptl:al
'
000
{b) RServes and Surplus 1
ODO
(l) Non-cummt Liabnllfes;
Long-Term Borrowings
(l) CulT'f!flt Uab1hties; 1 -
(a) Short•Tetm lorrowlngs J 900
 ntAssets: 5 7,32,500
eel Assets: (I) Tangible 6 50,000
(ii) Intangible 75,000
(b) Non-Current Investments
(2) Current Assets: 20,000
(a)Current Investments 61,000
7
(b) Inventories 36500
(c) cash and cash Equivalents 9 75 000
TOTAL
Notes to Accounts
31.3.2017
NoteNo. Particulars
1. Reserves and Surplus:
Surplus I.e. Balance In the Statement of Profit and Loss
1,25 000
125 000
'
2. Long•Tenn Borrowings: 120/o Debentures 2 25 000
2 25 000
3. Short-Term Borrowings: Bank Overdraft 75 000
75 000
4. Short-Term Provisions: Provision for Taxation .t. 100 000 '
100 000
s. Tangible Assets;
Machinery 8,37,500 5
Accumulated Depreciation _ _ _ _ _ _ __ _ _ _i===!.:1~05~0~0~04_ _~~!!.tl
7 32 500 4
6. Intangible Assets: Goodwill 50000
50000
7. Inventories: Stock in Trade 61000
61000
Additional Information:
(i) f 50,000, 12% Debentures were issued on 31.3.2017.
(ii) During the year a piece of machinery costing f 40,000, on which accumulated depreciation was f
20,000, was sold at a loss off 5,000. (CBSE 2017, modifted)
Solution:
CASH FLOW STATEMENT OF SRS LTD. FOR THE YEAR ENDED 31 sr MARCH 2017
Particulars Details t Amount
(A) Cash Flows From Operating Activities:
Net Profit before Tax
Adjustments for non-operating and non-cash items:
\75,000
Interest on Debentures (1,75,000 x 12%)
21,000
Depreciation on Machinery
55,000
Amortisation--of Goodwill
Loss on Sale oj Machinery 25,000
5 000
Operating Profit before Working Capital Changes
Increase in Stock-m-Trade 2,81,000
Cash Generated from Operations 25 000
Income Tax Paid • 2,56,000
Net Cash from Operating Activities 62 500
(B) cash Flows from Investing Activities:
Sale of Machinery
Purchase of Machinery 15,000
Purchase of Non-Current Tnvestments (3,55,000)
Net Cash used in Investing Activities 25000
(C) Cash Flows from Financing Activities:
Issue of Shares
Issue of 12% Debentures 1,00,000
Interest paid on Debentures 50,000
Increase in Bank Overdraft (21,000)
Net Cash from Financing Activities 37500
Net Decrease In Cash and Cash Equivalents [(A) + (B) + (C)]
C.ash and cash Equivalents at the beginning of the period (26,500 + 35,000)
,cash and Cash E uivalents at the end of the iod 36 SOO + 20 ooo
CASH R.OW STATEMENT _ SOLVED EXAMINATION QUESTIONS
Working Notes:
(1) calculatlon of Net Pro
Net Profit as r flt before Tax: ,000
Add: Provisio~fo~=:~ of Profit and Loss 1 ~,000
Net Profit before Tax t_1s,ooo
(2)
Or. calculation of mach·inery purchased and depreciation provided on machinerv . .
during the year:. Cr .
Particulars
Machinerv A/c
Particulars '
15,000
To Balance b/d '
5,22,500 By Bank A/c (Sale)
By Accumulated Depreciation A/C
20,000
5,000
To Bank A/c (Purchase) {Bal. fig.) By Statement of Profit and LOSS (LOSS on sale) 8 37 500
3,55,000
By Balance c/d s,n.soo
8 77.500 Cr.
Or. Accumulated Depreciation Aic
Particulars '
70,000
To Machinery A/c
To Balance c/d
Particulars
'
20,000 By Balance b/d
1,05,000 By Statement of Profit and Loss (&I. fig.)
55 ooo
1.25 ooo
125000 statement:·
e
rom th i IIO owinQ Balance Sheet of Aianta Ltd, as on 31st March, 2017, preoare cash Flow 31,3.2016
Note No. 31.3,2017
Particulars (') (')
EQUITY AND LIABILITIES
(1) Shareholders' Funds: 10,00,000 10,00,000
(a) Equity Share Capital 2,40,000 1,20,000
1
(b) Reserves and Surplus

~
(2) Non•Current Liabilities: 2,40,000
(a) Long term Borrowings: 90/o DebenbJres -(
(3) current Liabilities: 1,80,000 2,40,000
2
(a) Trade Payables 180,000 160,000
3
Cb) Other Current Liabilities 19,20,000 17,60,000
TOTAL
ASSETS
(1) Non•Current Assets:
(a) Fixed Assets 12,00,000
\\
4 13,40,000
(i) Tangible Assets 2,40,000 1,60,000
(b) Non-Current Investments
(2) Current Assets:
5

1,20,000 1,60,000
I
(a) Inventories 1,60,000 1,60,000
(b) Trade Receivables 60,000 80,000
(c) Cash and Cash EQuivalents 19,20,000 17,60,000
TOTAL
N 0 tes to Accounts 31·3·2017 31-3·2016
Particulars (') (f1
Note No
Reserves and Surplus:
1. 1,20,000 1,20,000
General Reserve
Balance in Statement of Profit and Loss
1.20,000 -
2,40,000 1,20,000
Trade Payables:
2. 1,40,000 1,20,000
Creditors 40,000
Bills Payable 1.20.000
1,80,000 2,40.000
other current Liabilities:
3. outstanding Rent 180,000 1.60,000
1,80,000 1,60,000
4. Tangible Assets:
Plant & Machinery 14,90,000 13,00,000
Accumulated oepreciation (l.S0.000) (1.00,000)
13,40,000 12,00,000
Non.Current Investments:
s. Shares in XYZ Lt.d, 2,40 000 1,60.000
2.40,000 1,60,000
 ftNAL•TIWG1U'O
562

Addltlo,,,,I Tnformiltion: ~ng , 50,00o and accu mutated depNdallon

(a) During tlle yur 2016-17, a machlnerf (5ample Pa-
15,000 was sold for' 32,000, . 2016.
1
{b) 9o/o Debentures, 80,000 were Issued on AP"1 '

Solution: ~ • TD FOR THE VEAR ENDED 31" MARCH 2017

CASH FLOW STATEMENT OF AJANTA L • Details (') Amount {tj
Part:icula~
(A) Cash Flows From Operating Activities: 1,20,000
Net Profit before Tax
Adjustments for non-operatmg and non•cash items:
28,800
Interest on Debentures
65,000
Oepreaabon on Plant & Mach,nerv
3,000
Loss on Sale of Machinery
2,16,800
Operating Profrt before Working Capital Changes
20,000
Increase in Creditors
(80,000)
Decrease in Btlls Payable
Increase In Outstanding Rent 20,000
Decrease In Inventories 40,000
Cash Generated from Opcral1ons 2,16,800
Income Tax Paid
Net Cash from Operating Activities 2,16,800
(8) Cash Flows from Investing Activities:
Sale of Machinery 32,000
Purdiase of Plant & Machinery (2,40,000)
Purchase of Shares in XYZ Ltd. (80,000)
Net Cash used in Investing Activities (2,88,000)
(C) Cash Flows from Financing Activities:
Issue of 9% Debentures
80,000
Interest paid on Debentures
(28,800)
Net Cash from Financing Activities
51,200
Net Decrease in Cash and Cash Equivalents [(A) + (Bl + (C)J
(20,000)
<:ash and c.ash Equivalents at the beginning of the period
80,000
cash and Cash Equivalents at the end of the period
60,000
Working Note:
Calculation of plant & machinery purchased and depreciation provided during the year:
Dr. Plant & Machinery A/ c
Particulars
To Balance b/d ' Particulars
13,00,000 By Bank A/c {Sale of machinery)
32,000
'
To Bank A/c (Purchase) (Bal. fig.)
By Accumulated Depreciation Ne 15,000
2,40,000
By Statement of Profit and Loss (loss on sale) 3,000
By Balance c/d 14,90,000
15,40,000
15,40,000
Dr.
Accumulated Depreciation A/c
Particulars
To Plant & Machinery A/c Particulars
15,000 By Balance b/d
To Balance c/d
1,50,000 By Statement of Profit and Loss (&,!. fig.}
1,65,000