CASH FLOW STATEMENTS

EXAMPLES FOR PRACTICE

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 EX.1 Liabilities 31.3.20X1 31.3.20X2 Assets 31.3.20X1 31.3.20X2
Rs. Rs. Rs. Rs.

Equity Share 3,00,000 4,00,000 Goodwill 1,15,000 90,000

Capital

15% Redeemable 1,50,000 1,00,000 Land & 2,00,000 1,70,000

Pref. Share Building
Capital
General Reserve 40,000 70,000 Plant 80,000 2,00,000

Profit & Loss A/c 30,000 48,000 Drs.& B/R 1,60,000 2,52,000

Creditors & B/P 55,000 83,000 Stock 97,000 87,000

Outstanding 20,000 16,000 Marketable 15,000 10,000

Expenses securities

Provision for 40,000 50,000 Cash and 10,000 8,000

Taxation Bank

Proposed 42,000 50,000

Dividend
6,77,000 8,17,000 6,77,000 8,17,000

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Solution: Ans:1

Cash Flow Statement for the year ended 31st March, 20X2

Particulars Rs. Rs
I Cash Flows from Operating Activities:
A. Closing Balance as per Profit & Loss A/c 48,000
Less: Opening balance as per Profit & Loss A/c (30,000)
Add: Proposed dividend during the year (on equity & Preference 50,000
shares)
Add: Transfer to reserve 30,000
Add: Provision for Tax 50,000
Add: Preference Dividend 22,500
B. Net Profit before taxation, and extraordinary item 1,70,500
C. Add: Items to be added
Depreciation 30,000
Goodwill written off 25,000 55,000
D. Operating Profit before working capital changes (B+C) 2,25,500
E. Add: Decrease in current assets & increase in current liabilities:
Increase in Creditors & B/P 28,000
Decrease in stock 10,000 38,000
F. Less: Increase in current assets & decrease in current liabilities:
Increase in Debtors & B/R 92,000
Decrease in Outstanding Expenses 4,000 (96,000)
G. Cash generated from operations (D+E-F) 1,67,500
H. Less: Income taxes paid (Net of Refund) (40,000)
I. Net cash from operating activities 1,27,500
II. Cash Flows from Investing Activities:
Purchase of plant (1,20,000)
Net cash used in investing activities (1,20,000)
III. Cash Flows from Financing Activities:
Proceeds from issuance of share capital 1,00,000
Redemption of preference shares (50,000)
Final dividend paid (on equity & preference shares) (42,000)
Preference Dividend (22500)
Net cash from financing activities (14,500)
IV Net Decrease in cash and cash equivalents (I+II+III) (7,000)
V Cash and cash equivalents at beginning of period
Marketable securities 15,000
Cash and bank 10,000 25,000
VI Cash and cash equivalents at end of period (IV+V)
Marketable securities 10,000
Cash and bank 8,000 18,000

Done in Session 15

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