(Cash at bank eo i. f securities seeyer Ind AS: r te one a rented ax cash equaled 2 Less: Bank Overdraft (vl (6) _Cashand Cash Equivalents atthe end © Cashinhand : CCashat bank I Marketable short-term highly ig securities sna as) ~ cash equivalents a8 Pet eae: Bank overdraft (when treated a8 cash 60 c ~ GRADED ILLUSTRATIONS Be Ilustration 1 (Classification of Cash Flows) Giving reason, classify the following into cash flows from 1. Operating Activities; 2. Investing Activities and 3. Financing Activities; (0) Cash sales of goods-in-trade. (i) Cash paid to suppliers of raw materials. (iii) Cash payments of salaries and wages to employees; (iv) Cash payments to acquire a fixed asset, say, machinery; (») Cash proceeds from issuing shares at a premium; (vi) Payment of dividends; (vit) Interest received on investment; (iti) Interest paid on debentures; (ix) Payment of income tax; and (x) Cash repayment ofa long-term loans, Solution 1. Cash Flows from Operating Activities 2. Cash Flows from Investing Activities Gv) Cash payment toa quire a fixed : (vii) Interest received on i “Sseh, say, machinery : Purchase of long-te 1 (cash outflow) m investment : It is ines 3. Financing Activities Sa income on investments (cash inflow). cash 2 Cos @ car lustration caassify he (300, (i) 10,00) (iii) Profit (in) Divid Solution (Non. (i) Non, (ii) Inve () Inve Mustratio The follow:or goods-in-trade (ash ¢ goods (cash outflow). : the office (cash auton ave capital inancing ativity (ath auto). (+0) Payment of dvdens: Ks ltd to ase of share al (+1) ters pid on debenture: Payment associated with loan (or borrowed) oa eo (9) Cash repayment of tne fan: Redemption ofan or boromed apa (cash tow) Mustration2 For each ofthe following ansatons, caste theresuling cash Now and at the nature of cash Now vs operating: Investing and financing (Acquired machinery fr ®2,50,000 paying 20% down and executing a bond forthe balance amount, (2). Paid €2.50,000to acquire shares in Infosyss Ld, and received a dividend of € 50,000 after acquisition. (2) Sold machinery of original cost %2,00,.000 with an accumulated depreciation of ®1,60,00 fr 60,000 ony. solution (0) Cash oe rom investing actives (20% 082,500) Purchase of machine ee (2) Cash Flow rm investing active (on share) (250900 ath ow om inveting cts (Diend Reed) 50900 (0) Ca ow som vesting sets Sale of Machine) 000 astation 3 Gasify the following transactions according to "Operating, Investing and Financing activites (0) 500, 12% Debentures of 8100 each converted into equty shares of equal amount, (i 10,000 Equity shares of€ 10 each issued to supplier of machinery, (i) Profit onsale of fixed assets ® 15,000. (i) Dividend received on shares 8,00. Selution ( Non-cash Activities ie. None (To be mentioned as foot note) (i Non-cash Activities i. None (To be mentioned as footnote) (i) Investing Activites (i) vesting Activities stration 4 The folowing balances were extracted from the Balance Sheet of Vivek Ltd, on 1 April, 2019: Tanta (teas) 4a cumulated deprecation ws the year 2019-20, the company purchased machines for % 4,00,000. It sold a machine costing & 1,00,000 pani depteciation &35,000) for 75.000, cen tt anderen ates (exhaingbank tlc on 31 March, 2020 wee LL 20400 and 80002Tope Corpor — ne Interest received on investments Calculate cah flow from operat jot 80 et gate vt e208 eee Solution i) Cash Flows from Operating Activities rot afer Depreciation Aad: Depreciation ess: Interest Received Les: Profi on Sale of Machine (75,00 ~ 65,000) Profit before working capital changes Increase in current ats (113,000 800,000) Increase in current abilities (8,00,000- 550,000) ‘Cash from Operations Cash used in Investing Activities Purchase of Machine Sle of Machine Interest on investments Cash used in investing activites Mlustration 5 (Cash Flows from Operating Activities) X Ltd. has the following balances on 01.04.2019 13,00,000, (5,0,000) 190100 50 63500 2.50900 Property, Plant & Equipment Less: Depreciation Bank (Other Curent Assets (Garren Lables Next year’ estimate are: (The company will acquire Property, Plant & Equipment costing % 2,50,000 after selling one machine fr 70,000, costing €1,50,000 on which depreciation provided will amount to & 90,000. (ii). The net profits will be 1,75,000 after providing for a depreciation of € 1,50,000. (iti) Current assets and current liabilities (other than bank balance) at 31.03.2020 are estimated to be & 7,50,000and % 4,00,000 respectively. At the end of the accounting year, the company deposits all the cash into the bank. Calculate the cash flows fr ‘operations and investing activities forthe year 2019-20. Solution Cash Flows from Operating Activities Particulars z 1,75,000 1,50,000 ‘Net Profit after depreciation ee dt ro mn neraing pret blr working capita changes «190%(Caeation of Prato ak of machinery: 7200 = shan sate 88900) = T OEE mestration 6 (Cash Flow from Operating Activities) ee GFA. al. (@ Proper: Bast & Sguipment (Bangle Asse: and and Bos Past sane | 20000 () tatngate Aer: (Goode 15000 sna mame | (eee. sae 25000 189 auto ere 1 ‘ ‘sahieead Ecmaenscn? e @ Depreciation o€€ 15000 and € 25000 hee teen charg on Plant, and Land and Being respecte i 2mii) Am income-tax of 354 : : Catelate cash fom operating aces a PT AS 3 (Revised) Solution bid en prnit forthe year after tx (Balancing Figae) profit before tax Calelation of rs ae nce ne ange eB snes 00 36009 smber, 2020 cash Faw Statement For the Year Ending on 31 Dee Hews ‘Activities 2 x rt aoe 1,13,000 Profitbefore ax andetrandiary tems se Amato we operating profit before working capital changes snam Increase in inventory (02,00) Increnein tra dbors on Incrnt ibis receivable - Increase inbils payable _ 26000 | Gaon Increasein creditors 12800 |_csm, Income tx paid 33900 [Net cash generated from operating Activities IMlustration 7 (Cash Flows from Operating Activities) From the following information, calculate cash flows from the operating activities for the year ended 31 March20™ | aruedcomrn | Statement of Profit and Loss Tspenss paid For the Year Ended 31 Marh 2020 Frovsen for 1. | Revenue from Operations (Gross Profits) ie | : Outstanding y mt | Other Income : snp Interest on lvestments ition Dividends Profit on Sale of Building Rent ftom Lecture Hall — ‘Commission Receivable 93,00, Flow. un. | Total Income (1 + 11) — Fm | Shag, 1. | expenes Mere Finance Costs: Interest on Debentures 15000) | Fina Depreciation and Amortization _ | Yue \ Provconto ie of Scar te ot jed 31 March 2020.Deprecaton ‘osson le of Friture Discount on tse of Debentret Ieeton Debentures Good wate off Proviso for Doubt Debts ‘Les: Adjustment fr Non-current and non-operati Interest on lavesments Dividend Received Profit on Sle of Land Rent Income Refund of Tx Insurance claim forlosson fire ‘Operating Profit fore Working Capital Changes ‘Add; Changes in Operating Current Liabilities editors (7,000 40,000) ‘Outstanding wages (25,000 - 15,000) crease in operating current assets Stock (150,000 ~ 125,000) “Less; Changes in Current Operating Assets Debtors (1,15,000- 45,000) Bills Receivable (15,000 10,000) Accrued commission 20,000 ~ 13,000) repaid Expenses (21,000 14,00) (Cash from Operating Activities Less: Income Tax Paid [Netash from Operating Activites beforeesteaordinaryitems > Bxraordinary items Insurance claim forloss on fire Refund of Tax (12,600) (21,000) (16500) (29,000) (02500) WORKING NOTES Provision for Tax Account z 35,000 45,000 80,000 Balanceb/d Profitand Loss Account a ACCOUNTING NOTES (9 Refund of tax could be deducted from the income tax paid. fen Income hasbeen treated as non-operating income nthe absence of any specifi information is presumed OM ‘an income from investment in lecture hall. Hence, itis cash flow from investing activities.Tri al Balance at the end of 31 March 2019: 10m “my y 15.000, . oe contac int , we eta ' som |, fy) wactofland was purchased for 7750 cath, ponds paysble in the amount of ® 6,000 were retied for cash at face and book vale. ‘an additions 20/60 equity shares were issued at pa for cash, piidends totalling ® 9,375 were paid. nin () 10400 ay Nev incon or 2019-2020 was ® 28450 afer allowing for deprecation of 9.500. = ts prcases tog te ayes of 2250 22000 | tag |, aut edison 205 Thtmcn eine pie Sn thefirm. nnn) su) Cor bes incented 08 14500 at 3 Mach, 220 000) ve poomns recto a 31 March 200 ttl 38,000. 71h) : method [AS-3 (Revised)] egace atten of cas flows for 2019-2029 wit he indie oe ta Ended 31 March 2020 cath Flow Steet Fr he er Ede 3 Steet nde Meo Iocan Cartes Labs et cash from operating actries Cath Flom from Investing Activites Paraecf ad Salo events ie cash wad in mveting ctries (© | Cau Frome from Financing Activities fuel hace CapitaPO Cote 10 (som | (ars) a Redemption of Bonds a ‘Dividend Paid at Net cah rom fan Qe he einen nd ch xin A” Lire anh and cash quaents ech oe — ag Cuan and cash eqialent at th nd of he Pood ————— oc Siete owe Tm pecan of tand in exchange for Bonds € 22.500. Mustration?_(CashFiowstatemens) Lud. prepare Cash Flow Statement row More Ltd Pe From the following Balance Sheet of Grow More Ltd NoteNo. | 31.320 @) - Partials sa 1 EQUITY AND LIABILITIES 1. Shareholder’ Fonds 1000920 | (@) ShareCapitel 2,00,000 25000 (©) Reserveand Surplus Reserve apo a SurpleAccount 2, | Non-Correst Liabilities oon : (0) Long-term Borrowings (Debentares) 3. | Current Libilities 7,00,000 (a) Trade Payables (Creditors) —- ue (©) Short-term Provisions (Provision for Taxation) 004 ‘7090 ee 25,00,000_| 200m a Sale of | assers et ca 1. Non-Current sets cash 1 (@) Property, Plant & Equipment (Tangible): Plant & Machinery 7,00,000 5.00000 ©) Land & Buildings 6,00,000 400,000, proce Proce (©) Non-Curten Investments 1,00,000 - Divid 2 | camrent Assets (a) Inventories (Stock-in-trade) 4,00,000 200,000 Net c (b) Trade Receivables (Debtors) 5,00,000, 7.0000 Neti (©) Cashand Cash Equivalents (Bank) 2,00,000 2.90000 = Toul 25,00,000 20,0000 ace : : *Catcuta (8) Depreciation @ 25% was charged on the opening value of Plant and Machinery. k nog " Clo (©) During the year one old machine costing 50,000 (WDV 20,000) was sold for & 35,000 ha (it) 50,000 was paid towards income tax during the year (iv) Building under construction was not subject to any depreciation, (9) Dividend proposed fr the year 2018-19 and 2019-20 are % 1,00,000 and % 2,00,000 respectively Prepare Cash flow Statement. {B.Com (Hons) Dalas s(Penied)and ind AS 7 Fae Tt md Est inary me ? sot = —_ Se ae Bas and Machinery oc itr Woking Cap teres a eee we coTade Poles 8.00000 aca from operations 150.009 ext paid 0.000 ss provided by operating activities cf fom Investing Activites sae = jechue of Property, Plant & Equipment | som ae a % 2,00,000(Provision for i ae 190 = 82004 divided) + © 80,000 (Provision for Tex) | cao ain iavertments SS ecilé machine | cath edi investing activities 0,000 ~~ cab lows from Financing Activities ae ‘rosdrom sue ofshares a ‘eis romissue of debentures Dried pad 00 ‘cask wed in financing activites 000 Saiscrease in cash or cash equivalents (A+B+O) Zz 000 (abi Cash equivalents at che beginning ofthe year | = 00 (atand Cash equivalents atthe end ofthe year _~ “cn of New Profit before Tax and extraordinary items : Casag belance of Surplus Account savoo “ TrastertoReserve 1sa000 Provision for Taxation jr Dividend payable = 1 (ond) a=WORKING NOTES rn for Taxation Account Proviso z 0000 | Balncebid pee +3,00,000 | Profit and Loss Account (Balancing Figure) Balanced ae Pant and Machinery Account « 100,000 | Depreciation lance bd : Statement of P&L (ro) 15000 | Bank(Sule) ‘unk (Balancing Figure] ssa8000 | Balnceefd Eeao00 ~ Note: Tt x assumed that proposed dividend forthe year 2018-19 From the following comparative Balance Sheets of Bangalore Mills Ltd. and additional information, declared and pad atthe proposed figure in 2015.9, Illustration 10. (Cash Flow Statement : Issue of Mortgage Loan) Prepare Flow Statement for the year 2020 “Ga = Panic Naene | 20987 Daag 1 | EQUITY AND TIABILTIES 7 1. Sharcholder’s Funds (0) Share Capital 70,000 (©) Reserveand Supe 7 Secures Premium 2.000 “p10 Retained Earnings 2383 " 2. Non-CarrentLnbilies ] wee (@) Long-term Bortowings (7% Mortgage Laon) . 3. Current Lables ue (©) Trade Payables (Creditors) ©) Ober Coen ie Sari a (©) Short-term Provisions (Provision for Taxation) . ea 1900 vata i . Tro TH 1. NonCurrent Assets (9) Property Plant & Eauipment (Tangible Pant & Machinery Accumulated Depreciation a bes Pore (37,000) (26200) —— 95,900 | 160oe [guna Depes (43,000) (as00m DCm 10,000 sa (2) tavemaris (Stock in-trade) (©) ‘Trade Receivable (Debtors) 10,220 sem ° Cashand Cash Equivalents (Bank) Con Hes 1) Otkerc ? arent Assets (Prepaid Expenses) ad 100 Total 7 5a T2720 150 wie » joa? att 4» ee ‘ A jon gol operating Pro Decrease in Im Decreasein Tr Decreas?in Te Decrease in ou Increase in pre ‘Cash genera Income tax p [Net cath gen (®)| Cash Flows Purchase of Purchase of Purchase of Sale of plan Net cash us (O} Cash Flow Issueofsh. Secusity Py Dividendssare Semen AS. Reed and nas. 7 aaiionalinformation: Dividend of€ 8,000 was paid during the yer, tA sum of€ 13,900 was transferred to provision fo tration account in 90 solution (Cath Flow Statement For The Year Ending 31 December 2020 Paricelars 5) Gath Flows fom Operating Activites Building Phat ‘operating prost before working captal changes Decreaseinlaventores Decrease in Trade Receivables Decresein Trade Payables Decrease inoutstandingsalares Increasein prepaid expenses Cash generated from operations come tax ple {Net cash generated from operations (Cash Flows from Investing Activities Purchase Building Purchase of Plant and Machinery ParcseofLand Sale of plant Net cash used in Investing Activities (©)| Cash Flows from Financing Activities Issue of Shares Capital Security Premium Dividends paid Net cash from financing activities Net increas in cash and cash Equivalents (A + B + ©) Cash and cash Equivalents in the beginning Cash and cash Equivalents atthe endDividend paid Balancec/d WORKING NOTES Earnings Account slaneebld profit during the year (Balancing Figure) Plant and Machinery Account Balancebd ‘Bank Parchase (Balancing Figure) ‘Pant (Depreciation) Balancecid Accumulated e y 462.000 | Bank: Sale of plant fe 20,000 | Depreciation on plant sold Pe Balanced < 32,000) Depreciation on Plant & Machinery Account z 14800 26,200 000 e Balanceb/d ‘Statement of Profit and Loss AJc (Depreciation) Building Account Balanceb/a (Cash (Purchase) ‘Mortgage Loan (Purchase) = 25,000 1,000 20,000 Balance od 716000 co Accumulated Depreciation on Building Account | x t | Balanceeld 45,000 | Balanceb/d B00 | Statement of Profitand Loss A/c (Depreciation) 200 B00 aa Provision for Taxation Account z v Income tax paid (Balancing Figure) 13,500 | Balanceb/d 1 Balance cid 1.400 | Statement of Profit and Loss AJe 13900 asa) mon during the year sor Profit before tax = Profit during the year = — 15,099 Add: Provision for tax = 13,990 a0 x € \ AAAS 23 Se 2 ®uh tow Stoment ASS (Revied) and nd AS? nustration 11 (Cash Flow Statement: Single Transaction with Double Effect) ‘the financial position ofa frm on 1April 2019 and 31 March 2020 was given hese ss iMac oop © hate 31 Marc 915 z ang, Career Lies for goods 736,000 sank Loan Fie Purchase Vendor Capital 1.48000 30,000 Cal ‘ade Recehables Inventories and aaings Machinery Delivery Va “000 35,000, 20000 50.000 50.00 “The delivery van ws £12,000 were paid on 3 in April2019 on hie purchase basis, payment of 5,000 was made immediately and ‘March 2020 to the vendor. In addition a sum of 2,000 was paid as intrest. The provision for sa rerPepachinery as on 1 April 2019, was% 27,000 and on 31 March, 2020 36000. Cash withdrawn & 26,000, Prepare a Cash Flow Statement. Solution (Cash Flow Statement (AS-3 (Revised) For the Year Ending 31 March 2020, Cash Flows from Operating Activities Capital as on 3.320 Add; Drawings ess Capi 2 04 13.19 [Net Profit before taxation and extraordinary iter Adjustments fr Depreciation % 36,000 - 27,000) Interest to Hite Vendor Increase in Trade Receivables [Net cash fom operating activities ‘Cash Flows from Investing Activities Purchase of machinery Purchase of delivery van (,000 + 12,000) Purchase ofbuilding Purchase ofland [Net cash used in investing activities Cash Flows from Financing Activities Bank Loan Interest pad [See Note] Drawings [Net cash wsed in financing activities [Net decrease in cash and cash equivalents (A+ B+) 26,000 192.000, 1.48.000 44000 9.000 2,900 5,000 5,000 3,000 (400) (15000) (47,000) (5.000) (10,00) 15,000 2.000) (26,000)‘Casha cash egulvaents in the Beinn ‘Cash and cosh oqalalnts atthe end ‘Non-Cash Tranactons: Purchase of delivery va # tne extent of F000 WORKING NOTES Mac Include cashflows that are respect of a fined asset acquiced on defersed payment Ilustration 12 Issue of Capital for Assets) The following were the summarised Balance Sheets of X hnery Account Depreciation Account (36,000. Balance e/d Ltd. as on 31 March: ~27,000) ined differently, For example, when the instal ‘bans Includes both Interest and loan; the err des ineningsetivdes and the lan clement isclasified under investing activites [Para 10 of terete AS ent Pld ig Revd, 1 Particulars NoteNo. 2019 1 | EQUITY AND LIABILITIES 1. Sharchlder's Funds (@) ShareCapia Equity Share Capital (€ 10 each) 500 t (6) Reserveand Surplus Securities Pema Reserve » General Reserve 250 in Surplus 300 4% 2. Non-Current Liabilities (@)_ Long-term Borrowings (14% Debentute) 200 » 3. Current Liabilities (©) Trade Payables (Creditors) 500 ry (©) Short-term Provisions (Provision for Tx) 150 a Tota i 1,900 23 1. Non-Current Assets (@) Property, Plant & Equipment (Tangible) Land & Building 400 8) ‘Machinery 0 ag Gan e | 8 (© Non-Current Investments (1085 1 *o Investment 2 Current Assets te) 200 a (@) Inventories (Stocks in-trade) 0 © Tastee els (© Cash i and Cash Equivalents (Bank) an um Total 10 lance:rinse 3d end nd A8.7 . ua e ‘Daring the yar ended 31" March, 202 0 the company ised 20a hares of 10 ech at par apn the Ase Claas Machinery a0 Goud = stock so (i, Depreciation charged on land and building and on machinery amounted t& 20 lakhs and 70 aks respectively. (ii) Amachinery costing € 65 lakhs, accumulated depreciation €25 lai, was sold for © 35 lakhs, nsalmen (a), Newinvestments were purchased on 14.2019, terest fe dig ends js) Ding the year ended 31 March 2020, the company paid income tax and dividend amountingto 5 lakhs and (453 aerate Daeg here oe "Pai income tax 8 (oi) Ignore comporate dividend tax Prepare cash low statement as per AS-3 (Revised) Com (Hons.) Delhi 2013, Modified] 20 General Reserve Account| patanceb’d Bank Account (Paid) tes | Spas Account (Provision) Balance cd Figure) — _— Goodwill Account a Particles eee ——~| prot and Loss Ale (Witten off) Balance b/d 30 | Balancecid Share Capital Account Particolars Blanceb/d » Balance id M ay = Machinery Account aa Particulars 8 Particulars ay Balanceb/d 750 | Bank Account as Share Capital Account 120 | Depreciation Account i Bank Account (B.F) 55 | Profitand Loss Account ' Balancee/d a 925 9 Surplus Account Gun Particulars e Ba z — Raseré 50 | Balance bid mn roposed Dividend 80 | Net Profit during the year before ae = 1g the year before tax a Balance cid ‘ss o —s Xd, Cash Flow Stateme itement for the Year Ending 31 March 2020 Particulars z t j Ls} A (in Lacs) (2 Cash Flows From Operating Activities pa lany Net Profit before tax Add: Non. Non-cash’Non-operating Expenses 375 Goodwill written off w | Net Iss———— < es ff uni Sateen AS Rove and S-> Depreciation on Bullding Depreciation on Machinery ‘oss on Sale of Machine ebentare Interest tase Non-cash/Non operating Income Income from Investments ting prot before working capi eaeinsock 25080-470) ne aume crease in Debtors (260 305) ecreas in creditors (500 400) Cash from Operating Activites before tax Income tx paid [Net Cash generated from operating activities ',| Cash Bows from Investment Activites Purchase of Machine Sale of Machine Purchase of 10% Investments Income from Investments Net cash used in Investment Activities | Cash Flows from Financing Activites Issue of Share Capital including Premivm (100 + 20) Dividends Paid Debenture Interest paid Net Gash generated from Financing Activities Netincrease in Cash and Cash equivalents during the year (A + B+) (116-18 412) lance of Cash and Cash Equivalents in the beginning Balance of Cash and Cash Equivalents at the end 486 a7) as) (100) v0 “s) 35 co) 120 0) es) ns as) 2 110) 10 120, Ilustration 13. (Purchase of Building for Equity and Cash) The following are the Balance Sheets of EQUITY AND LIABILITIES 1. Shareholder’s Funds (@) Share Capital Equity Share Capital (©) Reserveand Surplus Securities Premium Surplus Account 2. Non-Current Liabilities (@) Long-term Borrowings (15% Deben 3. Current Liabilities (@) Trade Payables - Creditors Bills Payables ures) ‘Shubhikishu Ltd. as at 31st March, 2019 and 31st March 2020 respectively. 27,00,000 7.70,000 55,05,000 500,000 11,00,000 2,50,000 25,00,000 7,50,000 50,45,000 10,00,000aster | some | 1 Non-current Assets | cy} 5925000 | assers se peaern Pan Easpenen (Tate) 2300 | ag (0) nang Caen) am | “an | (0) Non-Cures investment | 2s 2. Catent Aes . (0 Tnventories (Stock nade) | Ba | tk 7 24 | MadeRecentl nao | cy (© Coohand Casha as) | 3a 2 a ) =a =| S| a. ‘Total SSS geen" | = Be ‘Notes to Accounts ee ee ee Sea coin rom even | Pepe, Pn Eines Cae) 750000 | som | pote on ef Rang! {4125.00 | 357500 ae Price 5:25 as: Accumulated Depreciation on Buldings [2soco0 | csi] eae (smn (a | te Acumusted Depreciation on Pat { c4s000) | 75010) 35325000 | sasammp Peencebl2 5 ee eee Fe ess; Provision for doubtful debts (7.00,000) (4,25,000) | 19,00,000 | 2000800 ‘tank Account | mise ~— 50000 | 4am | CC ‘Additional Information itn mtn cataprelumol oon "Oco¥r 218. = (i) Investments were sold at a profit of 50% on cost. (iii). During the year a machine costing ® 5,00,000 (accumulated depreciation € 2,00,000) was sold ata profit of 20% Plants Acco ‘on Book Value. Balance c/d (iv) During the year building costing €10,50,000 was purchased by issue of 20,000 equity shares of 10 each ata premium of @ 1 per share and balance by cash. () A building costing ® 5,00,000 (with accumulated depreciation of € 3,50,000) was sold for & 1,70.000. Prepare Cash Flow Statement as per AS 3 (Revised). Show all workings clearly. Gian n {B.Com (Hons,) Delhi 2010, Modified NetPro Solution cai Net Pr Analysis of Non-Current Items Adjust Building Account Prelim Particulars © | Particulars fo Provis Palace bid 35,75,000 | Bank Account ose Provi Equity Share Capital Account 200,000 | Accumulated Depreciation Alc 3.50000 Inter ‘Securities Premium Aecount 20,000 | Balance c/d sasaon Prof Protemer AS-3 (Revel) and nd as. 7 ‘ ne RRS | Geert) [SEE ae pating AOU Accumulated Depretetion Account (Land and 1230000 [90,000 anced! stement of P&L Alc (Profit) Investments Account = 15.1350 730.000 cash rom investments sold 725000 = 35.75.09 Prat on sl of investments = 0% of 528, (215099) Sale Price 5.25000 + 2,62,000 = € 7,87,500 2250009 (375009) Sem | Aaa ee Sarmeat of Proitand Lows Ae 20,0000 Bak Account | = “Accumulated Depreciation (Plant) count Net Profit (5,05,000 ~ 50,45,000) ‘Add: Provision for Tax ‘Net Profi before Tax Adjustments: Preliminary Expenses writen off Provision for Depreciation (Building) Provision for Depreciation (Plants) Interest on Debentures Profit onsale of Balding Profit onsale of Investmentstonne tin Peto deny oD rete hr i i iraesntecae) (000) | mipyee ered) 200000 Gein dace) ‘23000; Seer eet de Der) oe Deer ere) Gi.) | istec een) Re Sick (nce) TH. 000 | sw TP [2800 | tm Cash generated from operating activities (| Gin Bows ron tering Retin 2.50000 Steers ee sitrtaiie alee Sic fle Pon octet Pans «20.0000 Purchase of Building (30000) Cac sedi vein ces onl (0 | Gait owe tom Financing Actes Relenpon ofebentuet, (00000 Premium on Redemption of Debentures ‘60.0) Inet on Debentures 12500) Cac ning ete ‘ Netcah info (AB) “orm Opening Cash an Ca uns ngs Cash and Cash Eguvalents a the od Ke Mlustration 14 (Items of Balance Sheet and Income Statement) ‘The financial informations of $ K Ltd. are given below: Nema of Balance Sheet As At 31* March, 2020 EQUITY AND LIABILITIES Share Capital General Reserve Securities Premium Surps Account Debentures ‘Accounts payable Income Tax Payable Other Current Liabilities ASSETS Plant and Machinery Accumulated Depreciation Investment (Long-Term . Stock ‘i J Accounts Receivable Cashat Bank ee aa las) 1,000 10 360 a : ” 250 0 400 ™ 200 x0 40 * 250 30 2500 30 1,550 1,800 (230) G00) 1320 130 315 “ 700 1 150 “ Balance b/d Bank AccouiCah ow Steen: AS:3 Revel) end nd as-3 “ens of some Staten the ye ended 350 a Pal. CC Cont of goods sold Operating expenses including depreciation Inereston debentures, Dividend received Gains onsale of investment Loss onsale of machinery Profit before tax Provision for tax Profit after tax Additional Information: (The company paid dividend of €150 lakhs during the year, (i) A machine costing & 80 lakhs, accumulated depreciation 50 cs, was sod during the yea, (iil) The book value of investment sold during the year was @ 43 lace Prepare cash flow statement as per AS-3 (Revised) Note: Ignore corporate dividend tax. {B.Com (Hons, Dethi 2014, Modified}[ame [ee ‘420 | Balanceb/d Balanceeld arp Account (Balancing Figures) ‘Surplus Account a ee Tpke anprei General Reserve 60 | Balancebid Dividend Palé (Balancing Figures) 150 | Profit forthe year Balance cid 400 0 EP E (Cash Flow Statement For the Year Ended 31 March 2020 ove: Asper Companies Act 2013, Supls Account shown in Note Accounts ts purely forthe purpose of es pprpitin, The ‘Cath Flows from Operating Activites [Net Profit before tax ‘Ada: Depreciation on Machinery Lesson sale of Machinery Interest on Debentures Less: Dividend Received Gain on Sale of Investment Operating Profit before working Capital Charges ‘Add increase Accounts Payable Decrease in Accounts Receivable Less: Decrease in Other Cucent ibilties Increase in Stock Cash generated from operating Activities Income tax paid [Net Cash from Operating Activites ‘Cost Flows from Investing Activities Purchase of Machine Sale of Machine Purchase of Investment Sale of Investment (43+ 15) Dividend on tnvestments ‘Net Cash used in investment activities Cash Flows from Financing Activities ‘Issue of Equity Share Capital Secutites Premium Account Redemption of Debentures 470 120 a7) as) 470 100 a0) (440) 130 (100) (330) 2 (168) 38 13 8) @wh Hw MAUNA AUR on tnt a» Dividend Pant | Reenurenieret 1M pi imation 18 ee rom the following Balance Sheets of «en statement of cash flow () Trade Payables (Creditors) assers id “oO Samm 4 eset ‘Additional information: w coe 2 enerien dient of 4.00 rely Saces were pad om 31-12/200, 0 deca 2 pi i by, 209. edi fx tla was tae inthe profit ands ic. 4 ww) atdnidedon pelenceibarestod 8 year 2019 f @ iam wrap ved by 3/0043 (0) Fixed asses coting€ 6000 (Accumulated Dep (vi). Preference shares redeemed inthe yes ( Oo) Edemption was 10% Solution ‘cash Flow Statement forthe year ending 31 December 2020 Toles n Corpora were sold for 250. Lossarising therefrom aoe aroun ofa fresh issue of uly shares Pree al [B.Com.(Hons,) Dethi 29157, nite aS ei ui a “Cash Flows from Operating Activities: 58,350 Det Profi efor tax WN) ‘Add: Non-Cash Expenses 13.260 “epecation on fed Aes OWN-3) pine (1? premio Redemption on oss on sla aed ses 7 4 6.000) Pes Profit on Revaluation of Plat, 7 ‘Operating profit before working capital changes (200) Incense in Sock 3.000 Decrestein Debiors sce acre in Credors Net cash frm operating acter a | Gash Plows fom Investing Acts aso Sale of Property, lint & Equipment ae ‘Purchase of Property, Pant & Equipment (W.N.-2) ea Purchate of Investments Net cash wed in inventing activites (aa © | Cash Flows from Financing Activities soo Aue of quit Shares (WN.-4) om ‘Redemption of referance Shares oo Dividend Paid nal) Equity ; Pelerence (20,000) Intri,Dividend (4.000) | tate ‘n000 [Net cash fom financing activities 12900 Netincreasein cas and eash Equivalents (A4B4C) “2350 ‘Ada: Bank Balance inthe begining (1,750 ~ Bank overdraft 22,000) 110250 (Cash and Cash Equivalent the end aon WoRKING NOTES . 1 Statement of Profit and Loss — Particulars t (Adjusted) Surplus at the ‘end 1,02,700 Adda iden’ “s Properad ping 1200, ~ Interim Dividend Pividand . = 4,000, ‘-Preferance Dividend 0 fe 7 Bonuslesue soi 0 Reserve for Replacement of Machinery ( 20200 15,085) - 3 a ‘Less: Opening Balance : |_ 1.00350. Adjusted Surplus [38 7 Preference: Wwilance bi ® », 4Aratance bi Bank (Parchases) (galancing Figure) ‘Ge ent (erations pat $9) Plat 3,000 16,660 Eauipment Account (At Cost) a a Pa z 33 950 cumulated Depreciation Account peak Account (Sale) -Scrpius Account (Loss on Sale) tioned a Accumulated Depreciation Account (Fixed Anes) Sa Bikes = a 4800 | Undence wid 90,020 fBatancedse ‘98.480 | ( Surplus Account (Depreciation charged Se Ca wl 1,03.280, |1s3280" A Detar Capt Aan i ta : Te Sc RE ae ‘ |_Bots Issue (Surplus Account) 25,000 ni cot eo = ae ; Fe] Preference Share Capital Account 5) udancebié* eloesSharliers Account (REE 20 an0 80,000 See 100,000 700,000, Preference Shareholders Account Bank Account Preference Share Capital Account > 20,000 Premium on Redemption (Surplus Account) ~ (il) As per Ind AS-7, equivalents. (Preference shares were redeemed on 31 March 2020, Hence, ‘Bank overdraft is part of cash and cash management, preferance dividend is calculated on &1,00,000 then it should be treated as cash and cashpen Carport ay Mlusteation 16 (Propos satement aa per AS-3 (Revised) Using Inde method From the part ular given Boye Prepare cash low s oe alance Sheets e ‘EQUITY AND LIABILITIES hie ay Share Cat ate ‘im tom Prefer Shae Capita 7.600 0% Genera Reserve a0 4) ‘ofan fous Asount 000 ie ‘outa doo in Centoes ‘000 2 Bi Payables #400 ty Proviso for aati ae ‘a ASSETS. ropery, Plant & Equipment wee cumulated Depreciation i 3 Less: Accumulated Dep a 00 to 100) i 34,400 pe ebiors Cash att 209 Prepaid expenses 1,000 a 162,400 aan ‘Additional Iformation (1). Provision for tax made forthe year 9,400 {@) Fixed assets costing € 20,000 (accumulated depreciation till date of sale on them € 6,000) were sold for 10000, {@) Interim dividend paid during the year & 9,000. Proposed dividend of lat year € 8,000 was declared and pid during the year Ignore corporate dividend tax. (4) New debentures were issued on 31st March, 2020, Show your workings clearly. {B.Com (Hons) Delhi, May 2017 (Modified) Tnerim vid Proposed Divi GGanera Reser Balance cfd Solution ‘Cash Flow Statement j for the year ending 31 March 2020 (A) | Cash Flows from Operating Activities Profit before tex (21,000 + 9,400) 30.400 Adjustments for: Depreciation 14,000 Loss on Sale of Machinery 4,000 Debenture Interest (15% of 12,000) 800 Operating Profit before working Capital 50,200 Adjustments for Working Capital Changes 3 (10,000)ott Reel dnd AS7 tts et 6 reps Expenses, “a? in Creors re pone Tox Pd pn rete Mon om Ives Act Case Pony at & Eglpmen om Sule of Property, Pant & Eaupny 400 shud in Investing Activity Min from Financing Actes 8 etre a eet DEEDIETES som of Preference Shares os ot of Debenture Interest 000 aoe | pom of Ines Dividend a 000 men of Final Dividend a 0,000 acah rom fanancing activites os 18000 peices in cash an cash Equivalents (ABC) 320 2.400 quand Cash Equivalents atthe binning of 1600 = ginning ofthe yn 2 an Cash Eutvalents the 2 isan alban Cas Equtvalent at dhe end of Ue yeu ye workin Nores £10,000 i snd paid ‘ied 9000 | Balance b/d 2000 psDiiend 8000 ano Reese 3,600 i eed 2.300 dified)) 35,000 saeps yeep ition i 0.000 15 Man gyn Acem a [statement of Profit and Lose Account) Falawesi ot March, 2020: formation for the year ended 316t M: Firreintiay, sy et it ee tax provision : Deen pad ae Anne a pd 6 Mok sl of Pape Plan qe (od) m oss lef Paper lat glpment ia Depevaton die Prof and La Account dim, apt gran ives amide i Prt and os Account . ok val of nese sl Ds Prot onal of nvetmen ia tntret income ro ave reed In Pro and lows Account a Antret expense eb in Prof aa Lows Account ae Interest actly pad tae Increase im working capt (excluding cash and bank balance) es Purchase of Property, Plan & Equpment a fxpendture on construction work nce ‘Gant ected for capa projets i Long term borrowings fom bunk suit rovison fo income tx debited in Prof and Loss Account a ith ad bank balance on 1-4-2019 bs Cash and bank bance on 313-2020 ine Your are required to prepare a Cash Flow Statement as per AS-3 Revised, Solution Cash Flow Statement for the year ending 31 March 2020 LL] Partcaars w Gin lakhs) | (nist Cash Flows from Operating Activities Net Prof before tax Addi Non-cash Expenses: 36,000 Depreciation Loss on Sale of Proper 24,000 of Property, Plant & Equi Interest expenses one 48 | 12,000 ae Non-operating Income: 72,048 Amortization ofc “apt in. grant received Profit on sl of investments (10) (120) e ee a eeme 7 ° : af @ oO rement :AS-3 (Revised) and Ind AS-7 Interest on Investments ‘Operating Profit before working C Changes: ess: Increase in working capital Cash from Operations Less: Income tax paid [Net cash used in operating activities Cash Flows from Investing Activities Sale of Property, Plant & Equipment (222 ~ 48) Sale of Investments (33,318 + 120) Interest Income from Investments Purchase of Property, Plant & Equipment Expenditure on construction work Net cash used in investing activities ‘Cash Flows from Financing Activities Grants for Capital Projects Long-term Borrowings snterest Paid Dividend Paid ‘Net cash from financing activities Net Increase in cash and cash Equivalents (AB4C) ‘Cash and cash Equivalents in the begining Cash and Cash Equivalents atthe end 3,000 (22,082) (41,688) 8 55,866 (13,08) (30202) ne oan) erase)