Foundations in Financial Management 12th Edition Chapter 5 Problems Solutions

Practice Test - MCQs test series for Term 1 Exams

T S GREWAL Solutions for Class 12-commerce Accountancy Chapter 5 - Cash Flow Statements

Chapter 5 - Cash Flow Statements Exercise 5.89

Solution Ex. 1

a. Cash Sale of Goods - Operating Activity

b. Cash Received against Revenue from Services rendered - Operating Activity

c. Cash Purchases of Goods - Operating Activity

d. Cash paid against Services Taken - Operating Activity

e. Patents Purchased - Investing Activity

f. Marketable Securities- Cash and Cash Equivalents

g. Bank overdraft - Financing Activity

h. Proceeds from Issue of Debentures - Financing Activity

i. Purchases of Share - Investing Activity

j. Repayment of Long-term Loan - Financing Activity

k. Commission Received - Operating Activity

l. Redemption of Debentures - Financing Activity

m. Interest of Debenture - Financing Activity

n. Interest on Investments - Investing Activity

o. Income Tax paid - Operating Activity

p. Income Tax Paid on Gain of Sale of Asset - Investing Activity

q. Cash Received from Debtors - Operating Activity

r. Cash Paid to Creditors. - Operating Activity

Chapter 5 - Cash Flow Statements Exercise 5.90

Solution Ex. 2

Classification of transactions as operating activities for a financial company:

a. Purchase of Shares on a Stock Exchange - Operating Activities

b. Dividend received on Shares - Operating Activities

c. Dividend paid on Shares- Refer Note

d. Loans given - Operating Activities

e. Loans taken - Operating Activities

f. Interest paid on borrowings - Operating Activities

A financial company is one that deals in shares, bonds, debentures, etc. on a regular basis. The transactions related to purchase and sale of these securities is regular phenomenon and forms part of their stock and is categorised under Operating Activity. However, dividend paid by them does not form part of Financing Activities.

Also, for a non-financial company issue of shares, debentures, etc. forms part of financing activities and not the operating activities.

Solution Ex. 3

a. Sale of Fixed Assets, Book Value Rs. 1,00,000 at a profit of Rs. 10,000 - Inflow

b. Sale of goods against cash - Inflow

c. Purchase of machinery for cash - Outflow

d. Purchase of Land and Building fort Rs. 10,00,000. Consideration paid by issue of debenture - No flow

e. Issued fully paid Bonus Shares - No flow

f. Cash withdrawn from bank - No flow

g. Payment of Interim Dividend - Outflow

h. Proposed Dividend - No flow

Solution Ex. 4

(a) Investing Activity: 50,000 (outflow)

(b) Investing Activity: 2,00,000 (outflow)

(c) Investing Activity: 60,000 (inflow)

Solution Ex. 5

	Particulars	Rs.
	Profit as per Statement of Profit and Loss (10,00,000 - 5,00,000)	5,00,000
	----- Add: Proposed Dividend	4,00,000
	Profit Before Taxation and Extraordinary Item	9,00,000

Chapter 5 - Cash Flow Statements Exercise 5.91

Solution Ex. 6

	Particulars	Rs.
	Profit as per Statement of Profit and Loss (7,20,000 - 4,00,000)	3,20,000
	---- Add: Proposed Dividend	1,60,000
	---- Add: Proposed Preference Dividend (Current Year, i.e. 10% of 6,00,000)	60,000
	---- Add: Interim Dividend	40,000
	Profit Before Taxation and Extraordinary Item	5,80,000

Solution Ex. 7

	Particulars	Rs.
	Profit as per Statement of Profit and Loss (2,00,000 - 1,45,000)	55,000
	---- Add: Proposed Dividend	50,000
	---- Add: Proposed Preference Dividend (Current Year)	50,000
	---- Add: Interim Dividend Paid	10,000
	Profit Before Taxation and Extraordinary Item	1,65,000

Chapter 5 - Cash Flow Statements Exercise 5.92

Solution Ex. 8

	Particulars	Rs.
	Profit as per Statement of Profit and Loss (3,36,000 - 1,00,000)	2,36,000
	Items to be Added :
	----------- Transfer to Reserve	1,00,000
	Proposed Dividend	72,000
	Interim Dividend	90,000
	Provision for Taxation	1,50,000
	Extraordinary Items (Earthquake Loss)	2,00,000
	---- Less : Extraordinary Items
	----------- Earthquake Insurance Proceeds	(1,00,000)
	---- Income Tax Refund	(3,000)
	Net Profit Before Tax and Extraordinary Items	7,45,000

Solution Ex. 9

	Particulars	Rs.
A	Cash Flow From Operating Activities
	Net Profit before Taxation and Extraordinary Items	4,47,000
	Items to be Added :
	---------- Depreciation on Machinery	84,000
	Loss on Sale of Furniture	18,000
	Interest on Borrowings	16,800
	Goodwill Amortised	18,600
	Items to be Deducted:
	----------- Profit on Sale of Investment	(12,000)
	---- Interest and Dividend Received	(27,600)
	Operating Profit before Working Capital Changes	5,44,800

Solution Ex. 10

Computationof Operating Profit before Working Capital Changes for the year ended March 31, 2019
	Particulars	Rs.
	Profit as per Statement of Profit and Loss (1,70,000 - 1,00,000)	70,000
	Transfer to General Reserve (5,00,000 - 4,00,000)	1,00,000
	Provision for Taxation (Current Year)	1,00,000
	Profit before Tax	2,70,000
	Items to be Added:
	----------- Depreciation for the year	75,000
	Operating Profit before Working Capital Changes	3,45,000

Chapter 5 - Cash Flow Statements Exercise 5.93

Solution Ex. 11

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Rs.	Rs.
	Profit as per Statement of Profit and Loss (Net Income)		20,000
	Items to be Added:
	----------- Depreciation	10,000
	----------- Goodwill written off	8,000	18,000
	Operating Profit before Working Capital Changes		38,000
	---- Add: Decrease in Current Assets
	----------- Trade Receivables	6,000
	----------- Prepaid Insurance	1,000
	---- Less: Increase in Current Assets
	----------- Inventories	(20,000)
	---- Less: Decrease in Current Liabilities
	----------- Outstanding Rent	(9,000)
	----------- Trade Payables	(6,000)	(28,000)
	CashGenerated from operations		10,000
	---- Less: Tax Paid		Nil
	Net Cash Flows from Operating Activities		10,000

Solution Ex. 12

Cash Flow From Operating Activities for the year ended March 31, 2019
	Particulars	Rs.	Rs.
	Net Profit after Provision for Tax and Proposed Dividend		2,15,000
	---- Add: Provision Tax		45,000
	---- Add: Proposed Dividend		50,000
	Profit Before Taxation		3,10,000
	Items to be Added:
	----------- Depreciation	25,000
	----------- Loss on Sale of Machinery	10,000
	----------- Patents Amortised	30,000	65,000
			3,75,000
	Items to be Deducted:
	----------- Income Tax Refund	(30,000
	----------- Gain on Sale of Land	(70,000)	(1,00,000)
	Operating Profit before Working Capital Changes		2,75,000
	---- Less: Net Tax Paid (45,000 - 30,000)		(15,000)
	Net Cash Flows from Operating Activities		2,60,000

Solution Ex. 13

Cash Flow From Operating Activities Fo the year ended ….
	Particulars	Rs.	Rs.
	Profit as per Statement of Profit and Loss		7,00,000
	---- Add: Transfer to Reserve		60,000
	Profit Before Extraordinary Items		7,60,000
	Items to be Added:
	----------- Depreciation on fixed Assets	40,000
	----------- Goodwill Amortised	20,000	60,000
			8,20,000
	Items to be Deducted:
	----------- Gain on Sale of Land		(90,000)
	Operating Profit before Working Capital Changes		7,30,000
	---- Less: Decrease in Current Liabilities
	----------- Trade Payable	(25,000)
	---- Less: Increase in Current Assets
	----------- Trade Receivables	(15,000)	(40,000)
			6,90,000
	---- Add: Decrease in Current Assets
	----------- Prepaid Expenses		8,000
	Cash Generated from Operations		6,98,000
	---- Less: Tax Paid		Nil
	Net Cash Flows from Operating Activities		6,98,000

Chapter 5 - Cash Flow Statements Exercise 5.94

Solution Ex. 14

Cash Flow From Operating Activities for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
	Profit as per Statement of Profit and Loss		6,40,000
	---- Add: Provision for Tax		20,000
	---- Less: Extraordinary Item
	----------- Insurance Claim		(50,000)
	Profit Before Tax and Extraordinary items		6,10,000
	Items to be Added:
	----------- Depreciation on Plant and Machinery		55,000
			6,65,000
	Items to be Deducted:
	----------- Gain on Sale of Investments		(20,000)
	Operating Profit before Working Capital Adjustments		6,45,000
	---- Add: Increase in Current Liabilities
	----------- Trade Payable	30,000
	---- Add: Decrease in Current Liabilities
	----------- Inventories	10,000	40,000
	---- Less: Increase in Current Assets		6,85,000
	----------- Trade Receivables	(40,000)
	----------- Prepaid Expenses	(14,000)	(54,000)
	Cash Generated from Operations before tax and Extraordinary items		6,31,000
	---- Less: Tax Paid		(15,000)
	Cash Flow from Operating Activities after Tax		6,16,000
	---- Add: Extraordinary Items
	----------- Insurance Claim		50,000
	Net Cash Flows from Operating Activities		6,66,000

Solution Ex. 15

Cash Flow From Operating Activities for the year ended …..
	Particulars		Rs.
	Profit as per Statement of Profit and Loss		8,00,000
	---- Add: Provision for Tax		1,10,000
	---- Add: Proposed Dividend		1,10,000
	---- Less: Compensation for Natural Disaster		(75,000)
	Profit Before Tax and Extraordinary items		9,45,000
	Items to be Added:
	----------- Depreciation	1,50,000
	----------- Loss on Sale of Investment	30,000	1,80,000
			11,25,000
	Items to be Deducted:
	----------- Profit on Sale of Land	(90,000)
	----------- Dividend Received	(20,000)	(1,10,000)
	Operating Profit before Working Capital Adjustments		10,15,000
	---- Add: Increase in Current Liabilities	70,000
	---- Add: Decrease in Current Assets	40,000	1,10,000
	-----		11,25,000
	---- Less: Increase in Current Liabilities	(10,000)
	---- Less: Increase in Current Assets	(60,000)	(70,000)
	Cash Generated from Operations		10,55,000
	---- Less: Net Tax Paid (1,20,000 - 10,000)		(1,10,000)
	Cash Flow from Operating Activities after Tax
	---- Add: Compensation for Natural Disaster		75,000
	Net Cash Flows from Operating Activities		10,20,000

Note: The answer given in the book is different.

Solution Ex. 16

Cash Flow From Operating Activities for the year ended March, 31, 2019
	Particulars		Rs.
	Profit as per Statement of Profit and Loss		18,00,000
	---- Add: Payment of Tax		64,000
	Profit Before Tax and Extraordinary items		2,44,000
	Items to be Added:
	----------- Loss on Sale of Assets	36,000
	----------- Depreciation and Amortisation Expenses	1,85,000	2,21,000
			4,65,000
	Items to be Deducted:
	----------- Dividend Received	(5,000)
	----------- Profit on Sale of Plant	(40,000)	(45,000)
	Operating Profit before Working Capital Adjustments		4,20,000
	---- Less: Decrease in Current Liabilities
	----------- Office Expenses Outstanding		(5,000)
	---- Add: Increase in Current Liabilities
	----------- Trade Payable ----	28,000
	----------- Selling Expenses Outstanding	3,000	31,000
	---- Less: Increase in Current Assets
	----------- Trade Receivables ----		(37,000)
	----------- Inventories ----		(16,000)
	Cash Generated from Operations		3,93,000
	---- Less: Tax Paid		(64,000)
	Net Cash Flows from Operating Activities		3,29,000

Chapter 5 - Cash Flow Statements Exercise 5.95

Solution Ex. 17

Cash Flow From Operating Activities
	Particulars		Rs.
	Profit as per Statement of Profit and Loss	5,000
	---- Add: Transfer to Reserve	35,000	40,000
	Profit Before Tax and Extraordinary items		40,000
	Items to be Added:
	----------- Depreciation written of (WN1)	22,000
	----------- Goodwill Written-off	10,000	32,000
	Items to be Deducted:
	----------- Profit on Sale of Asset		8,000
	Operating Profit before Working Capital Adjustments		64,000
	---- Less: Increase in Current Assets
	----------- Bills Receivables		(41,000)
	---- Add: Increase in Current Assets
	----------- Debtors ----		35,000
	---- Less: Decrease in Current Liabilities
	----------- Outstanding Expenses ----		(18,000)
	Cash Generated from Operations		40,000
	---- Less: Tax Paid		Nil
	Net Cash Flows from Operating Activities		40,000

Working Note:

Provision for Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Assets A/c (40,000 - 28,000)*	12,000	By Balance b/d	20,000
To Balance c/d	30,000	By Profit and Loss A/c	22,000
	42,000		42,000

Particulars	Rs.
Cost of Asset Sold	40,000
---- Less: Provision for Depreciation*	(12,000)
Book Value	28,000
---- Less: Saleof Assets	(36,000)
Profit on Sale	8,000

Solution Ex. 18

		Cash Flow Statement
	Particulars			Amount ( Rs. )	Amount ( Rs. )
	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				1,00,000
	Items to be Added :
	Depreciation			20,000
	Goodwill amortised			7,000
	Transfer to General Reserve			30,000
	Items to be Deducted :
	Gain on sale of machinery			(3,000)	54,000
	Operating Profit before Working Capital Adjustments				1,54,000
	Less : Increase in Current Assets
			Trade Receivables	(3,000)
			Prepaid Expenses	(200)
	Less : Decrease in Current Liabilities
	Outstanding Expenses			(2,000)
	Add : Increase in Current Liabilities
	Trade Payables			6,000	800
	Cash Generated from Operations				1,54,800

Chapter 5 - Cash Flow Statements Exercise 5.96

Solution Ex. 19

		Cash Flow Statement
	Particulars			Amount ( Rs. )	Amount ( Rs. )
	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				10,000
	Items to be Added :
	Depreciation			2,000
	Operating Profit before Working Capital Adjustments				12,000
	Less : Increase in Current Assets
			Trade Receivables	(1,000)
			Other Current Assets	(2,000)
			Inventories	(3,000)
			Accrued Income	(1,000)
	Less : Decrease in Current Liabilities
	Income Received in Advance			(1,000)
	Add : Increase in Current Liabilities
	Trade Payables			2,000
	Expenses Payable			500
	Provision for Doubtful Debts			200
	Add : Decrease in Current Assets
	Prepaid Expenses			1,000	(4,300)
	Cash Generated from Operations				7,700

Solution Ex. 20

Cash Flow From Operating Activities for the year ended March, 31, 2019
	Particulars		Rs.
	Profit as per Statement of Profit and Loss		43,750
	----------- Provision for Tax		18,750
	Profit Before Taxation		62,500
	Items to be Added:
	----------- Loss on Sale of Furniture	1,500
	----------- Depreciation	15,000	16,500
	Items to be Deducted:
	----------- Profit on Sale of machinery	(2,500)
	----------- Rent	(15,000)
	----------- Interest on Investment	(2,000)	(19,500)
	Operating Profit before Working Capital Adjustments ---		59,500
	---- Less: Increase in Current Assets
	----------- Trade Receivables ----	(5,000)
	----------- Prepaid Expenses	(1,500)
	---- Add: Increase in Current Liabilities
	----------- Outstanding Expenses ----	3,000
	---- Less: Decrease in Current Liabilities
	----------- Trade Payables ----	(2,500)
	---- Add: Decrease in Current Assets
	----------- Inventories ----	15,000	9,000
	Cash Generated from Operations		68,500
	---- Less: Tax Paid		(18,750)
	Net Cash Flows from Operating Activities		49,750

Chapter 5 - Cash Flow Statements Exercise 5.97

Solution Ex. 21

Cash Flow From Operating Activities for the year ended March, 31, 2019
	Particulars		Rs.
	Purchase of Plant and Machinery		(1,55,000)
	Sale of Plant and Machinery		45,000
	Net Cash Used in Investing Activities		(1,10,000)

Working Notes:

Plant and Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars
To Balance b/d	9,60,000	By Depreciation	35,000
To Profit and Loss A/c (Profit on Sale)	15,000	By Bank A/c (Sale)	45,000
To Bank A/c (Purchase)	1,55,000	By Balance c/d	10,50,000
	11,30,000		11,30,000

Solution Ex. 22

Cash Flow From Investing Activities for the year ended ….
Particulars	Rs.	Rs.
Purchase ofMachinery	(1,40,000)
---------- Sale ofMachinery	50,000
---------- Sale of Patents	90,000	Nil
Net Cash Used in Investing Activities		Nil

Working Notes:

1:

Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	9,50,000	By Provision for Depreciation A/c	60,000
To Profit and Loss A/c (Profit on Sale)	20,000	By Bank A/c (Sale)	50,000
To Bank A/c (Purchase)	1,40,000	By Balance c/d	10,00,000
	11,10,000		11,10,000

2:

Patents Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	3,00,000	By Patents Written off	50,000
To Profit and Loss A/c (Profit on Sale)	40,000	By Bank A/c (Sale) (Balancing Fig.)	90,000
		By Balance e c/d	2,00,000
	3,40,000		3,40,000

3:

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Asset A/c	60,000	By Balance b/d	1,10,000
To Balance c/d	1,50,000	By Profit and Loss (Depreciation Charged during the year)	1,00,000
	2,10,000		2,10,000

Solution Ex. 23

		Cash Flow Statement
	Particulars		Amount ( Rs. )	Amount ( Rs. )
	Cash Flow from Investing Activities
	Sale of Machinery		13,000
	Purchase of Machinery		(35,000)	(22,000)
	Cash Used in Investing Activity			(22,000)

Working Notes :

Machinery Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Balance b/d	50,000	Bank A/c ( Sale )	13,000
Profit and Loss A/c ( Profit on Sale )	3,000	Accumulated Depreciation	15,000
Bank A/c ( Purchase- Bal. Fig. )	35,000	Balance c/d	60,000
	88,000		88,000

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Fixed Assets A/c	15,000	Balance b/d	25,000
Balance c/d	15,000	Profit and Loss A/c ( Dep. charged during the year- Bal. Fig. )	5,000
	30,000		30,000

Solution Ex. 24

Cash Flow From Investing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Purchase ofLand and Building	(6,50,000)
Interest received on Investments	75,000
Sale of Debentures	2,75,000
Purchase of Debentures	(7,50,000)	(10,50,000)
Net Cash Used in Investing Activities		(10,50,000)

Working Notes:

1:

Land and Building Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	9,00,000	By Depreciation A/c	50,000
To BankA/c	6,50,000	By Balance c/d	15,00,000
	15,50,000		15,50,000

2:

Investment in 10% Debentures Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	5,00,000	By Bank A/c (Sale)	2,75,000
To Profit and Loss A/c (Profit on Sale)	25,000	By Balance c/d	10,00,000
By Bank A/c(Purchase)	7,50,000
	12,75,000		12,75,000

Chapter 5 - Cash Flow Statements Exercise 5.98

Solution Ex. 25

Cash Flow From Investing Activities
	Particulars	Rs.	Rs.
	Purchase ofMachine	(2,50,000)
	Purchase of Goodwill	(1,00,000)
	Purchase of Investments	(1,50,000)
	Sale of Machine	35,000
	Sale of Investment	50,000
	Sale of Patents	40,000
	Interest and Dividend Received	10,000
	Rent Received	20,000
	Net Cash Flow from (used in) Investing Activities		(3,45,000)

Solution Ex. 26

Cash Flow From Investing Activities for the year Ended March 31, 2019
	Particulars	Rs.	Rs.
	Cash Flow from Investing Activities
	---------- Sale of Machinery	1,50,000
	---------- Purchase of Machinery	(1,50,000)
	---------- Purchase of Non-Current Investments	(2,00,000)
	Net Cash Flow from (used in) Investing Activities		(2,00,000)

Working Notes:

Plant and Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	5,00,000	By Bank A/c (Sale)	1,50,000
To BankA/c (Purchase - Bal. Fig)	1,50,000	By Balance c/d	5,00,000
	6,50,000		6,50,000

Solution Ex. 27

Cash Flow From Investing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Purchase ofPlant and Machinery	(2,60,000)
Purchase of Investments	(60,000)
Sale of Plant and Machinery	40,000
Sale of Land	1,60,000
Net Cash Flow from (used in) Investing Activities		(1,20,000)

Working Notes:

1:

Plant and Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	8,50,000	By Depreciation A/c	50,000
To BankA/c (Purchase - b/f)	2,60,000	By Bank A/c (Sale)	40,000
		By Profit and Loss A/c (Loss on Sale)	20,000
		By Balance c/d	10,00,000
	11,10,000		11,10,000

2

Land Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	2,00,000	By Bank A/c (Sale-Bal. Fig)	1,60,000
To Profit and Loss A/c (Profit on Sale)	60,000	By Balance c/d	1,00,000
	11,10,000		11,10,000

Chapter 5 - Cash Flow Statements Exercise 5.99

Solution Ex. 28

Cash Flow From Investing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Purchase ofPatents	(25,000)
Purchase of Furniture	(2,25,000)
Interest received on Investment	14,000
Sale of Investment	20,,000
Sale of Land	10,000
Net Cash Flow from Used in Investing Activities		(2,06,000)

Note:

It has been assumed that investments have been sold at their Book Value at the end of the accounting period.

Working Note:

Computation of Interest on Investments

Solution Ex. 29

Cash Flow From Investing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Purchase ofPlant and Machinery	(2,70,000)
Purchase of Investment	(1,00,000)
Purchases of Goodwill	(50,000)
Rent Received	20,000
Dividend Received (1,50,000 x 12%)	18,000
Sale of Plant and Machinery	35,000
Sale of Investment	80,000
Interest on Investments	6,000
Sale of Patents	20,000
Net Cash Used in Investing Activities		(2,41,000)

Working Note:

1 : Computation of Interest on Investments

2

Patents Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	1,00,000	By Profit and Loss A/c (Written-off)	20,000
To Profit and Loss A/c (Profit on Sale)	10,000	By Bank A/c (Sale-Bal. Fig)	20,000
		Balance c/d	70,000
	1,10,000		1,10,,000

3

12% Long -Term Investments Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	50,000	ByBank A/c (Sale-Bal. Fig)	80,000
To Bank A/c (Purchase)	1,00,000	By Balance c/d	80,000
To Profit and Loss A/c (Profit on Sale)	10,000
	1,60,000		1,60,000

4

Plant and Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	6,00,000	By Depreciation A/c	70,000
To Bank A/c (Purchase-Bal. Fig)	2,70,000	By Bank A/c (Sale)	35,000
		By Profit and Loss A/c (Loss on Sale)	15,000
		By Balance c/d	7,50,000
	8,70,000		8,70,000

Chapter 5 - Cash Flow Statements Exercise 5.100

Solution Ex. 30

Cash Flow From Investing Activities
Particulars	Rs.	Rs.
Purchase ofMachinery	(1,00,000)
Sale of Investment	26,000
Net Cash Flow from (used in) Investing Activities		(74,000)

Working Notes:

Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	5,00,000	By Accumulated Depreciation A/c	20,000
To Bank A/c (Purchase-Bal. Fig)	1,00,000	By Bank A/c (Sale)	26,000
		By Profit and Loss A/c (Loss on Sale)	4,000
		By Balance c/d	5,50,000
	6,00,000		6,00,000

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Machinery A/c	20,000	By Balance b/d	1,00,000
To Balance c/d	1,70,000	By Profit and Loss A/c (Dep. Charged during the year - Bal. Fig)	90,000
	1,90,000		1,90,,000

Solution Ex. 31

Cash Flow From Investing Activities
	Particulars	Rs.	Rs.
	Purchase ofMachinery	(6,20,000)
	Purchase of Investment	(2,40,000)
	Purchases of Goodwill	(1,00,000)
	Sale of Machinery	2,00,000
	Rent Received	50,000
	Dividend Received	20,000
	Sale of Investments	80,000
	Interest on Debentures	8,000
	Sale of Patents	1,50,000
	Net Cash Flow from (used in) Investing Activities		(4,52,000)

Note: Dividend and interest paid is considered as a part of Financing Activities.

Solution Ex. 32

		Cash Flow Statement
	Particulars		Amount ( Rs. )	Amount ( Rs. )
	Cash Flow from Financing Activities
	Loan Repaid		(1,00,000)
	New Loan Raised		1,50,000	50,000
	Cash Flows from Financing Activity			50,000

Working Notes :

Long Term Loan Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Bank A/c (Loan Repaid)	1,00,000	Balance b/d	2,00,000
Balance c/d	2,50,000	Bank A/c (Loan Raised)	1,50,000
	3,50,000		3,50,000

Solution Ex. 33

Cash Flow From Financing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Proceeds from Issue of Equity Shares	1,10,000
Redemption of 12% Debentures	(50,000)
Interest Paid	(18,000)
Net Cash Flow from Financing Activities		42,000

Chapter 5 - Cash Flow Statements Exercise 5.101

Solution Ex. 34

Cash Flow From Financing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Issue of Shares	1,25,000
Transfer to Securities Premium Reserve	1,25,000
Issue of Debentures	1,00,000
Premium on redemption of Preference Shares (5% of 1,50,000)	(7,500)
Interim Dividend Paid (15% of 4,00,000)	(60,000)
Redemption of Preference Share Capital	(1,50,000)
Interest on Debentures (12% of 3,00,000)	(36,000)
Interest on Preference Share Capital	(55,000)
Net Cash Flow from Financing Activities		41,500

Solution Ex. 35

Cash Flow Statement for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Cash Flow from Investing Activities
----------- Purchase of Machinery	(20,000)
----------- Sale of Machine	4,000
Net Cash Flow from (used in) Investing Activities		(16,000)
Cash Flow from Financing Activities
----------- Proceeds from Issue of Equity Shares	5,000
----------- Repayment of Bank Loan	(10,000)
Net Cash Flow from (used in) Financing Activities		(5,000)

Working Notes:

Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	40,000	By Accumulated Depreciation A/c	4,000
To Bank A/c (Purchase-Bal. Fig)	20,000	By Bank A/c (Sale)	4,000
		By Profit and Loss A/c (Loss on Sale)	2,000
		By Balance c/d	50,000
	60,000		60,000

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Machinery A/c (Bal. Fig.)	4,000	By Balance b/d	10,000
To Balance c/d	12,000	By Profit and Loss A/c (Dep. Charged during the year)	6,000
	16,000		16,000

Solution Ex. 36

		Cash Flow Statement
	Particulars			Amount ( Rs. )	Amount ( Rs. )
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				7,50,000
	Items to be Added :
	Provision for Tax			75,000
	Depreciation			2,00,000
	Loss on Sale of Machine			20,000
	Operating Profit before Working Capital Adjustments			10,45,000
	Less : Increase in Current Assets
			Trade Receivables and Inventories	(1,50,000)
	Add : Increase in Current Liabilities
	Trade Payables			2,75,000
	Cash Generated from Operations			11,70,000
	Less : Taxes Paid			(75,000)
	Cash Flow from Operating Activities				10,95,000
B	Cash Flow from Investing Activities
	Sale of Fixed Assets Purchase of Fixed Asset			80,000 (4,67,500)
	Cash Flows from Investing Activities				3,87,500

Working Notes:

Fixed Asset Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	21,25,000	By Accumulated Depreciation A/c	1,62,500
To Bank A/c (Purchase-Bal. Fig)	4,67,500	By Bank A/c (Sale)	80,000
		By Profit and Loss A/c (Loss on Sale)	20,000
		By Balance c/d	23,30,000
	25,92,500		25,92,500

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Fixed Asset A/c (Bal. Fig.)	1,62,500	By Balance b/d	10,62,500
To Balance c/d	11,00,000	By Profit and Loss A/c (Dep. Charged during the year)	2,00,000
	12,62,5000		12,62,5000

Chapter 5 - Cash Flow Statements Exercise 5.102

Solution Ex. 37

Cash Flow From Financing Activities for the year ended March, 31, 2019
Particulars	Rs.	Rs.
Proceeds from Issue of 12% Debentures	1,00,000
Interest Paid	(19,000)
Dividend Paid	(50,000)
Net Cash Flow from (used in) Financing Activities		(31,000)

Note:

Issue of bonus shares does not lead to any change in cash flow statement. Therefore, increase in share capital due to issue of bonus shares will not be classified as Financing Activities.

Solution Ex. 38

		Cash Flow Statement
	Particulars			Amount ( Rs. )	Amount ( Rs. )
	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				7,25,000
	Items to be Added :
	Provision for Tax			1,12,500
	Interest on Debentures			41,000
	Interest on Bank Loan			9,000
	Dividend on Equity Shares			90,000
	Dividend on Preference Shares			37,500
	Transfer to General Reserve			75,000	3,65,000
	Operating Profit before Working Capital Adjustments				10,90,000
	Less : Increase in Current Assets
			Trade Receivables and Inventories	(1,50,000)
	Add : Increase in Current Liabilities
	Trade Payables			2,50,000	1,00,000
	Cash Generated from Operations				11,90,000
	Less : Taxes Paid				62,500
	Cash Flow from Operating Activities				11,27,500

		Cash Flow Statement
	Particulars		Amount ( Rs. )	Amount ( Rs. )
	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Shares		2,50,000
	Redemption of Preference Shares		(2,50,000)
	Increase in Securities Premium Reserve		25,000
	Proceeds from Issue of Debentures		2,75,000
	Repayment of Bank Loan		(25,000)
	Interest on Debentures		(41,000)
	Interest on Bank Loan		(9,000)
	Dividend on Equity Shares		(90,000)
	Dividend on Preference Shares		(37,500)
	Cash Flows from Financing Activity			97,500

Working Notes :

Provision for Tax Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Bank A/c ( Bal. fig. )	62,500	Balance b/d	50,000
Balance c/d	1,00,000	Profit and Loss A/c	1,12,500
	1,62,500		1,62,500

Calculation of Interest on Debentures

Calculation of Interest on Bank Loan

Note : Dividend on equity shares (@8%) and on preference shares (@5%) is calculated on their opening balances respectively.

Chapter 5 - Cash Flow Statements Exercise 5.103

Solution Ex. 39

Cash Flow Statement
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	----------- Profit as per Statement of Profit and Loss (Net Profit)	20,000
	----------- Profit Before Taxation	20,000
	Items to be Added:	-
	Operating Profit before Working Capital Adjustments ---	20,000
	---- Add: Decrease in Current Assets
	------------ Stock	80,000
	---- Add: Increase in Current Liabilities
	----------- Bills Payable	1,20,000
	Cash Generated from Operations	2,20,000
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		2,20,000
B	Cash Flow from Investing Activities
	----------- Sale of Fixed Assets	3,00,000
	Net Cash Flows from Investing Activities		3,00,000
C	Cash Flow from Financing Activities
	----------- Repayment of Long-Term Loan	(5,00,000)
	Net Cash Flows from (used in) Financing Activities		(5,00,000)
D	Net Increase or Decrease in Cash and CashEquivalents		20,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		1,50,000
	Cash and Cash Equivalents at the end of the period		1,70,000

Solution Ex. 40

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	----------- Profit as per Statement of Profit and Loss (1,83,000 - 82,000)	1,01,000
	----------- Profit Before Tax	1,01,000
	Items to be Added:
	----------- Interest on Debentures	7,500
	Operating Profit before Working Capital Adjustments ---	1,08,500
	---- Less: Increase in Current Assets
	----------- Inventories	(56,000)
	---- Add: Increase in Current Liabilities
	----------- Trade Payable	40,000
	---- Less: Decrease in Current Liabilities
	----------- Other Current Liabilities	(8,000)
	---- Add: Decrease in Current Assets
	----------- Trade Receivables	38,000
	Cash Generated from Operations	1,22,500
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		1,22,500
B	Cash Flow from Investing Activities
	----------- Purchase of Fixed Assets	(1,57,000)
	----------- Purchase of Investments	(13,000)
	Net Cash Flows from (used in)Investing Activities		(1,70,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue of Equity Share Capital	50,000
	----------- Proceeds from Issue of 15% Debentures	30,000
	----------- Interest on Debentures (50,000 x 15%)	(7,500)
	Net Cash Flows from Financing Activities		72,500
D	Net Increase or Decrease in Cash and CashEquivalents		25,000
	---- Add : Cash and Cash Equivalent in the beginning of the period		70,000
	Cash and Cash Equivalents at the end of the period		95,000

Assumption:

Debentures were issued at the end of the accounting period. Accordingly, Interest on debentures has been computed on the opening balance (@15% on 50,000).

Chapter 5 - Cash Flow Statements Exercise 5.104

Solution Ex. 41

		Cash Flow Statement for the year ended March 31, 2019
	Particulars			Amount ( Rs. )	Amount ( Rs. )
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				9,000
	Items to be Added :
	Provision for Taxation			32,000
	General Reserve			10,000
	Goodwill			10,000
	Proposed Dividend			45,000	97,000
	Operating Profit before Working Capital Adjustments				1,06,000
	Less : Increase in Current Assets
			Trade Receivables	(33,000)
	Less : Decrease in Current Liabilities
	Other Current Liabilities			(2,000)
	Add : Decrease in Current Assets
	Inventories			18,000
	Add : Increase in Current Liabilities
	Trade Payables			18,000	1,000
	Cash Generated from Operations				1,07,000
	Less : Tax Paid				(28,000)
	Net Cash Flows from Operating Activities				79,000
B	Cash Flow from Investing Activities
			Sale of Land and Building		53,000
			Purchase of Non-Current Investments		(25,000)
			Purchase of Plant and Machinery		(1,01,000)
	Net Cash Used in Investing Activities				(73,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital				50,000
	Dividend Paid				(39,000)
	Net Cash Flow from Financing Activities				11,000
D	Net Increase or Decrease in Cash and Cash Equivalents				11,000
			Add : Cash and Cash Equivalent in the beginning of the period		17,000
	Cash and Cash Equivalents at the end of the period				28,000

Chapter 5 - Cash Flow Statements Exercise 5.105

Solution Ex. 42

Cash Flow Statement for the year ended March, 31, 2013
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Net Profit		1,00,000
	----------- Operating Profit before Working Capital Adjustments ---		1,00,000
	---- Add: Decrease in Current Assets
	----------- Inventories	6,000
	----------- Trade Receivables	54,000
	---- Less: Decrease in Current Liabilities
	----------- Trade Payable	(8,000)	52,000
	Cash Generated from Operations		1,52,000
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		1,52,000
B	Cash Flow from Investing Activities
	----------- Purchases of Tangible Assets	(2,90,000)
	----------- Purchases on Non Current Investment	(72,000)
	Net Cash Flows from (used in) Investing Activities		(3,62,000)
C	Cash From Financing Activities
	----------- Issue of Share Capital	2,00,000
	----------- Long Term Borrowings	(50,000)
	Net Cash Flows from Financing Activities		1,50,000
D	Net Increase or Decrease in Cash and CashEquivalents		(60,000)
	-- Add : Cash and Cash Equivalent in the beginning of the period (70,000 + 1,34,000)		2,04,000
	Cash and Cash Equivalents at the end of the period		1,44,000

Chapter 5 - Cash Flow Statements Exercise 5.106

Solution Ex. 43

Cash Flow Statement for the year ended March, 31, 2014
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	2,00,000
	----------- Profit Before Tax		2,00,000
	Items to be Added:
	----------- Amortisation of Goodwill	1,44,000
	----------- Depreciation	1,32,00
	----------- Loss on Sale of Fixed Assets	4,000	2,80,000
	Operating Profit before Working Capital Adjustments ---		4,80,000
	---- Less: Increase in Current Assets
	----------- Inventories	16,000
	----------- Trade Receivables	54,000
	---- Less: Decrease in Current Liabilities
	----------- Trade Payable	(50,000)
	----------- Short-Term Provisions	(54,000)	1,74,000
	Net Cash Flows from Operating Activities		3,06,000
B	Cash Flow from Investing Activities
	----------- Sale of Machinery	12,000
	----------- Purchases of Machinery	(5,88,000)
	Net Cash Flows from (used in) Investing Activities		(5,76,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue of Share Capital	2,00,000
	----------- Proceeds from Long Term Borrowings	1,40,000
	Net Cash Flows from Financing Activities		3,40,000
D	Net Increase or Decrease in Cash and CashEquivalents		70,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		10,50,000
	Cash and Cash Equivalents at the end of the period		11,20,000

Working Notes:

Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	20,00,000	By Bank A/c (Sale)	12,000
To Bank A/c (Purchases-Bal. Fig)	5,88,000	By Depreciation A/c (on part of machinery)	32,000
		By Profit and Loss A/c (Loss on sale)	4,000
		By Balance c/d	25,40,000
	25,88,000		25,88,000

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Machinery A/c	32,000	By Balance b/d	3,00,000
To Balance c/d	4,00,000	By Profit and Loss A/c (Dep. Charged during the year)	1,32,000
	4,32,000		4,32,000

Chapter 5 - Cash Flow Statements Exercise 5.107

Solution Ex. 44

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	----------- Profit as per Statement of Profit and Loss (1,20,000 - 25,000)	(95,000)
	Items to be Added: Provision for Tax (WN)	51,000
	----------- Depreciation (WN)	25,000
	Profit Before Taxation	(19,000)
	Items to be Added:
	----------- Interest Paid	7,500
	Operating Profit before Working Capital Adjustments ---	(11,500)
	---- Less: Increase in Current Assets
	----------- Trade Payables	(14,000)
	----------- Inventories	(7,000)
	---- Add: Decrease in Current Liabilities
	----------- Trade Receivables Other Current Assets	14,000 4,000
	Cash Generated from Operations
	---- Less: Tax Paid	(53,000)
	Net Cash Flows from Operating Activities		(67,500)
B	Cash Flow from Investing Activities
	----------- Purchase of Fixed Assets (WN)	(1,69,000)
	Net Cash Flows from (used in) Investing Activities		(1,69,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Additional Loan	20,000
	----------- Interest Paid Proceeds from Share Capital	(7,500) 2,00,000
	Net Cash Flows from Financing Activities		2,12,500
D	Net Increase or Decrease in Cash and CashEquivalents		(24,000)
	----------- Add : Cash and Cash Equivalent in the beginning of the period		49,000
	Cash and Cash Equivalents at the end of the period		25,000

Working Notes:

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	2,15,000
To Bank A/c (Purchase-Bal. Fig)	1,69,000
		By Balance c/d	3,84,000
	3,84,000		3,84,000

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
		By Balance b/d	23,000
To Balance c/d	48,000	By Profit and Loss A/c (Dep. Charged during the year)	25,000
	48,000		48,000

Provision for Tax Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Bank A/c ( Bal. fig. )	53,000	Balance b/d	70,000
Balance c/d	68,000	Profit and Loss A/c	51,000
	1,21,000		1,21,000

Chapter 5 - Cash Flow Statements Exercise 5.108

Solution Ex. 45

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	----------- Profit as per Statement of Profit and Loss (1,50,000 - 2,00,000)	(50,000)
	----------- Transfer to General Reserve	3,40,000
	----------- Dividend Paid	50,000
	----------- Profit Before Taxation	3,40,000
	Items to be Added:
	----------- Interest Paid	54,000
	----------- Loss on Sale of Machinery	14,000
	Operating Profit before Working Capital Adjustments ---	4,08,000
	---- Less: Increase in Current Assets
	----------- Inventories	(1,00,000)
	----------- Trade Receivables	(1,00,000)
	---- Add: Decrease in Current Liabilities
	----------- Trade Payable	3,50,000
	Cash Generated from Operations	5,58,000
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		5,58,000
B	Cash Flow from Investing Activities
	----------- Sale of Machinery	6,000
	----------- Purchase of Fixed Assets	(5,20,000)
	Net Cash Flows from (used in) Investing Activities		(5,14,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue ofEquity Share Capital	5,00,000
	----------- Proceeds from 7% Preference Share Capital	60,000
	----------- Dividend Paid	(50,000)
	----------- Redemption of 9% Debentures	(2,00,000)
	----------- Interest Paid (60,000 x 9%)	(54,000)
	Net Cash Flows from Financing Activities		2,56,000
D	Net Increase or Decrease in Cash and CashEquivalents		3,00,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		2,00,000
	Cash and Cash Equivalents at the end of the period		5,00,000

Working Notes:

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars
To Balance b/d	15,00,000	By Bank A/c (Sale)	6,000
To Bank A/c (Purchase-Bal. Fig)	5,20,000	By Profit and Loss A/c (Loss on Sale)	14,000
		By Balance c/d	20,00,000
	20,20,000		20,20,000

Chapter 5 - Cash Flow Statements Exercise 5.109

Solution Ex. 46

Cash Flow Statement for the year ended March, 31, 2015
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Net Profit before Tax and Extraordinary Items		2,50,000
	Items to be Added:
	----------- Depreciation	99,000
	Intangible Assets w/off	10,000
	Interest on Debentures (@12% on 5,00,000)	60,000
	----------- Provision for Tax	50,000	2,19,000
	Operating Profit before Working Capital Adjustments ---		4,69,000
	---- Less: Increase in Current Assets
	----------- Inventories	(62,000)	(62,000)
	Cash Generated from Operations		4,07,000
	---- Less: Tax Paid (Net)	70,000	(70,000)
	Net Cash Flows from Operating Activities		3,37,000
B	Cash Flow from Investing Activities
	----------- Purchase of Non-Current Investments	(25,000)
	----------- Purchase of Fixed Assets	(3,82,000)
	Net Cash Flows from (used in) Investing Activities		(4,07,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue of Share Capital	1,00,000
	----------- Repayments of Debentures	(50,000)
	----------- Interest Paid on Debentures	(60,000)
	----------- Increase in Bank o/d	1,00,000
	Net Cash Flows from (used in) Financing Activities		90,000
D	Net Increase or Decrease in Cash and CashEquivalents		20,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		1,20,000
	Cash and Cash Equivalents at the end of the period		1,40,000

Working Notes:

Provision for Taxation
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Bank	70,000	By Balance b/d	90,000
To Balance c/d (b/f)	70,000	By PandL	50,000
	1,40,000		1,40,000

Also, Cash and Cash Equivalents includes the current investments.

Chapter 5 - Cash Flow Statements Exercise 5.110

Solution Ex. 47

Cash Flow From Operating Activities for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (4,8,000 - 3,75,000)	1,05,000
	----------- Interim Dividend	75,000
	Profit Before Tax	1,80,000
	Items to be Added:
	----------- Interest Paid on Debentures	27,000
	----------- Depreciation	60,000
	Operating Profit before Working Capital Adjustments ---	2,67,000
	---- Less: Increase in Current Assets
	----------- Trade Receivables	75,000
	---- Add: Increase in Current Liabilities
	----------- Trade Payable	30,000
	---- Add: Decrease in Current Assets
	----------- Inventories	60,000
	Cash Generated from Operations	2,82,000
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		2,82,000
B	Cash Flow from Investing Activities
	----------- Sale ofLand	60,000
	----------- Purchase of Machinery	(1,50,000)
	Net Cash Flows (used in) from Investing Activities		(90,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue ofShare Capital	1,20,000
	----------- Redemption of 10% Debentures	(1,80,000)
	----------- Interim Dividend Paid	(75,000)
	----------- Interest Paid on Debentures	(27,000)
	Net Cash Flows (used in) from Financing Activities		(1,62,000)
D	Net Increase or Decrease in Cash and CashEquivalents		30,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		1,50,000
	Cash and Cash Equivalents at the end of the period		1,80,000

Chapter 5 - Cash Flow Statements Exercise 5.111

Solution Ex. 48

		Cash Flow Statement for the year ended March 31, 2012
	Particulars			Amount ( Rs. )	Amount ( Rs. )
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				(50,000)
	Items to be Added :
	Depreciation			1,20,000
	Interest			36,000	1,56,000
	Operating Profit before Working Capital Adjustments				1,06,000
	Less : Increase in Current Assets
			Trade Receivables	(80,000)
			Inventories	(1,00,000)
	Add : Increase in Current Liabilities
	Trade Payables			10,000	(1,70,000)
	Cash Generated from Operations				(64,000)
	Less : Tax Paid				NIL
	Net Cash Flows from Operating Activities				(64,000)
B	Cash Flow from Investing Activities
			Purchase of Tangible Fixed Assets		(4,20,000)
	Net Cash Used in Investing Activities				(4,20,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital				4,00,000
	Proceeds from Long Term Borrowings				90,000
	Interest Paid				(36,000)
	Net Cash Flow from Financing Activities				4,54,000
D	Net Increase or Decrease in Cash and Cash Equivalents				(30,000)
			Add : Cash and Cash Equivalent in the beginning of the period		3,70,000
	Cash and Cash Equivalents at the end of the period				3,40,000

Tangible Fixed Assets Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Balance b/d	9,00,000	Depreciation A/c	1,20,000
Bank A/c ( Purchase- Bal. Fig. )	4,20,000	Balance c/d	12,00,000
	13,20,000		13,20,000

Solution Q 49

		Cash Flow Statement for the year ended March 31, 2017
	Particulars			Amount ( Rs. )	Amount ( Rs. )
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss				1,25,000
	Items to be Added :
	Depreciation			62,500
	Interest Proposed Dividend Provision for Tax			15,000 50,000 1,25,000	2,52,500
	Operating Profit before Working Capital Adjustments				3,77,500
	Less : Increase in Current Assets
			Trade Receivables	(50,000)	(50,000)
	Cash Generated from Operations				3,27,500
	Less : Tax Paid				(75,000)
	Net Cash Flows from Operating Activities				2,52,500
B	Cash Flow from Investing Activities
			Purchase of Tangible Fixed Assets Short term loans and advances	(2,12,500) (1,00,000)
	Net Cash Used in Investing Activities				(3,12,500)
C	Cash Flow from Financing Activities
	Proceeds from Long Term Borrowings			1,00,000
	Interest Paid Bank Overdraft Dividend Paid			(15,000) 50,000 (50,000)
	Net Cash Flow from Financing Activities				85,000
D	Net Increase or Decrease in Cash and Cash Equivalents				25,000
			Add : Cash and Cash Equivalent in the beginning of the period		25,000
	Cash and Cash Equivalents at the end of the period				50,000

Chapter 5 - Cash Flow Statements Exercise 5.112

Solution Ex. 50

Cash Flow Statement for the year ended March, 31, 2013
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Net Profit		2,00,000
	---- Add: Non Operating Expenses
	----------- Depreciation on Plant and Machinery	30,000
	---- Less: Non Operating Incomes
	----------- Profit on Sale of Machinery	(10,000)	20,000
	Operating Profit Before Working Capital Changes		2,20,000
	---- Add: Increase in Current Liabilities
	----------- Trade Payables	1,00,000
	---- Add: Decrease in Current Assets
	----------- Inventories	50,000
	---- Less: Increase in Current Assets
	----------- Trade Receivables	(2,00,000)	(50,000)
	Cash Generated from Operations		1,70,000
	---- Less: Tax Paid		-
	Net Cash Flow from Operating Activities		1,70,000
B	Cash Flow from Investing Activities
	--- Sale of Plant and Machinery	60,000
	----------- Purchases on Plant and Machinery	(2,80,000)
	Net Cash Flows from (used in) Investing Activities		(2,20,000)
C	Cash From Financing Activities
	----------- Issue of Share Capital	1,00,000
	Net Cash Flows from Financing Activities		1,00,000
D	Net Increase or Decrease in Cash and CashEquivalents		50,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		30,000
	Cash and Cash Equivalents at the end of the period		80,000

Working Notes:

Plant and Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars
To Balance b/d	3,00,000	By Depreciation A/c	30,000
To P and L A/c (Profit)	10,000	By Bank A/c (Sale)	60,000
To Purchases (b/f)	2,80,000	Balance c/d	5,00,000
	5,90,000		5,90,000

Chapter 5 - Cash Flow Statements Exercise 5.113

Solution Ex. 51

Cash Flow Statement for the year ended March, 31, 2018
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (2,04,000 - 1,68,000)	36,000
	----------- Transfer to GeneralReserve	30,000
	----------- Interim Dividend	1,20,000
	----------- Provision for Taxation	27,000
	Profit Before Tax	2,13,000	2,13,000
	Items to be Added:
	----------- Depreciation	2,10,000
	----------- Profit on Sale of Investments	(1,500)
	----------- Profit on Sale of Fixed Assets	(6,000)
	Operating Profit before Working Capital Adjustments ---		4,15,500
	---- Less: Increase in Current Assets
	----------- Trade Receivables	(7,35,000)
	---- Less: Decrease in Current Liabilities
	----------- Trade Payable	(1,02,000)
	---- Add: Decrease in Current Assets
	----------- Inventories	90,000
	Cash Generated from Operations		(3,31,500)
	---- Less: Tax Paid	(2,22,000)
	Net Cash Flows from (used in) Operating Activities		(5,53,500)
B	Cash Flow from Investing Activities
	----------- Sale of Investments	25,500
	----------- Sale of Fixed Assets	36,000
	----------- Purchase of Investments	(54,000)
	Net Cash Flows from Investing Activities		7,500
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue of10% Mortgage Loan	8,10,000
	----------- Interim Dividend Paid	(1,20,000)
	Net Cash Flows from Financing Activities		6,90,000
D	Net Increase or Decrease in Cash and CashEquivalents		1,44,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		4,47,000
	Cash and Cash Equivalents at the end of the period		5,91,000

Working Notes:

1

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	12,00,000	By Bank A/c (Sale)	36,000
To Profit and Loss A/c (Profit on Sale)	6,000	By Depreciation (Bal. Fig.)	2,10,000
		By Balance c/d	9,60,000
	12,06,000		12,06,000

2

Investments Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	1,50,000	By Bank A/c (Sale)	25,500
To Profit and Loss A/c (Profit on Sale)	1,500	By Balance c/d	1,80,000
To Bank A/c (Purchases-b/f)	54,000
	2,05,000		2,05,500

3

Provision for Taxation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Bank A/c (Tax Paid- b/f)	2,22,000	By Balance b/d	2,25,000
To Balance c/d	30,000	By Profit and Loss A/c	27,000
	252,000		2,52,000

Chapter 5 - Cash Flow Statements Exercise 5.114

Solution Ex. 52

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (30,600 - 30,500)	100
	----------- Proposed Dividend	23,000
	----------- Transfer to General Reserve	10,000
	----------- Provision for Taxation	33,000
	----------- Profit Before Tax		66,100
	Items to be Added:
	----------- Depreciation on Machinery	14,000
	----------- Depreciation on Building	10,000
	Operating Profit before Working Capital Adjustments ---		90,100
	---- Add: Decrease in Current Assets
	----------- Inventories	26,000
	----------- Trade Receivables	15,800
	---- Less: Decrease in Current Liabilities
	----------- Trade Payable	(14,800)
	Cash Generated from Operations		1,17,100
	---- Less: Tax Paid	(28,000)
	Net Cash Flows from Operating Activities		89,100
B	Cash Flow from Investing Activities
	----------- Purchase of Machinery	(33,000)
	----------- Purchase of Goodwill	(5,000)
	Net Cash Flows from (used in) Investing Activities		(38,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue Equity Shares	50,000
	----------- Repayment of Bank Loan	(70,000)
	----------- Dividend Paid	(23,000)
	Net Cash Flows from (used in) Financing Activities		(43,000)
D	Net Increase or Decrease in Cash and CashEquivalents		8,100
	----------- Add : Cash and Cash Equivalent in the beginning of the period		500
	Cash and Cash Equivalents at the end of the period		8,600

Working Note:

1

Machinery Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	1,50,000	By Depreciation	14,000
To Bank A/c (Purchases-b/f)	33,000	By Balance c/d	1,69,000
	1,83,000		1,83,000

2

Provision for Taxation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Bank A/c (Tax Paid)	28,000	By Balance b/d	30,000
To Balance c/d	35,000	By Profit and Loss A/c (b/f)	33,000
	63,000		63,000

Chapter 5 - Cash Flow Statements Exercise 5. 115

Solution Ex. 53

Cash Flow From Operating Activities for the year ended March, 31, 2014
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of PandL	1,40,000
	----------- Provision for Tax	23,000
	----------- Profit before Tax		1,63,000
	---- Add: Non Operating Expenses
	----------- Depreciation	90,000
	----------- Loss on Sale of Fixed Assets	8,000	98,000
	Operating Profit Before Working Capital Changes		2,61,000
	---- Add: Decrease in Current Assets
	----------- Inventory	22,000
	---- Less: Increase in Current Assets
	----------- Trade Receivables	(3,000)
	---- Less: Decrease in Current Liabilities
	----------- Trade Payables	(68,000)	(49,000)
	Cash Generated from Operations		2,12,000
	---- Less: Tax Paid		(16,000)
	Net Cash Flow from Operating Activities		1,96,000
B	Cash Flow from Investing Activities
	----------- Sale of Fixed Assets	2,000
	----------- Purchase of Patents	(20,000)
	----------- Purchase of Fixed Assets	(3,50,000)
	Net Cash Flows from (used in) Investing Activities		(3,68,000)
C	Cash From Financing Activities
	----------- Issue ofShare Capital	1,00,000
	----------- Long-term Borrowings	75,000
	----------- Increase in Bank Overdraft	2,000
	Net Cash Flows from Financing Activities		1,77,000
D	Net Increase or Decrease in Cash and CashEquivalents (A+ B + C)		5,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		17,000
	Cash and Cash Equivalents at the end of the period (14,000 + 8,000)		22,000

Working Note:

1

Prov. For Tax Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Bank A/c (Tax Paid)	16,000	By Balance b/d	11,000
To Balance c/d	18,000	By Profit and Loss A/c (B/f)	23,000
	34,000		34,000

2

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	17,00,000	By Bank A/c- Sales	2,000
To Bank A/c- Purchases	3,50,000	By Acc. Depreciation A/c	40,000
		By Profit and Loss A/c (Loss on Sale)	8,000
		By Balance c/d	20,00,000
	20,50,000		20,50,000

3

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Fixed Assets A/c	40,000	By Balance b/d	90,000
To Balance c/d	1,40,000	By Profit and Loss A/c (B/f)	90,000
	1,80,000		1,80,000

Chapter 5 - Cash Flow Statements Exercise 5.116

Solution Ex. 54

Cash Flow Statement for the year ended March 31, 2016
	Particulars		Amount ( Rs. )	Amount ( Rs. )
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss		75,000
	Provision for Tax		1,00,000	1,75,000
	Profit Before Taxation			1,75,000
	Items to be Added :
	Goodwill written off		25,000
	Debentures interest		21,000
	Depreciation		55,000
	Loss on sale of machinery		5,000	1,06,000
	Operating Profit before Working Capital Adjustments			2,81,000
	Less : Increase in Current Assets
		Inventories	(25,000)	(25,000)
	Cash Generated from Operations			2,56,000
	Less : Tax Paid			(62,500)
	Net Cash Flows from Operating Activities			1,93,500
B	Cash Flow from Investing Activities
		Sale of machinery	15,000
		Purchase of machinery	(3,55,000)
		Purchase of non-current investment	(25,000)	(3,65,000)
	Net Cash Used in Investing Activities			(3,65,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital		1,00,000
	Increase in Bank Overdraft		37,500
	Interest on Debentures paid		(21,000)
	Proceeds from Issue of Debentures		50,000
	Net Cash Flow from Financing Activities			1,66,500
D	Net ↑/↓ in Cash and Cash Equivalents (A+B+C)			(5,000)
		Add : Cash and Cash Equivalent in the beginning of the period (26,500+35,000)		61,500
	Cash and Cash Equivalents at the end of the period (36,500+20,000)			56,500

Working Notes :

Machinery Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Balance b/d	5,22,500	Bank A/c ( Sale )	15,000
Bank A/c ( Purchase- Bal. Fig. )	3,55,000	Accumulated Depreciation A/c	20,000
		Profit and Loss A/c ( Loss on Sale )	5,000
		Balance c/d	8,37,500
	8,77,500		8,77,500

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Machinery A/c	20,000	Balance b/d	70,000
Balance c/d	1,05,000	Profit and Loss A/c ( Dep. charged during the year- Bal. Fig. )	55,000
	1,25,000		1,25,000

Chapter 5 - Cash Flow Statements Exercise 5.117

Solution Ex. 55

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	1,40,000
	----------- Transfer to General Reserve	60,000
	----------- Profit Before Tax		2,00,000
	Items to be Added/Subtracted
	----------- Depreciation	1,60,000
	----------- Interest on Debentures	20,000
	----------- Profit on Sale of Investments	(16,000)
	----------- Loss on Sale of Fixed Assets	10,000	1,74,000
	Operating Profit before Working Capital Adjustments ---		3,74,000
	---- Add: Decrease in Current Assets
	----------- Trade Receivables	2,20,000
	---- Less: Decrease in Current Liabilities
	----------- Trade Payable	(30,000)	1,90,000
	Cash Generated from Operations		5,64,000
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		5,64,000
B	Cash Flow from Investing Activities
	----------- Sale of Fixed Assets	20,000
	Sale of Non-Current Investment	96,000
	Purchase of Non-Current Investment	(1,50,000)
	----------- Purchase of Fixed Asset	(8,80,000)
	Net Cash Flows from (used in) Investing Activities		(9,14,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue Equity Shares	4,00,000
	----------- Proceeds from Issue of Debentures	1,20,000
	----------- Securities Premium Reserve	20,000
	----------- Repayment of Bank Loan	(30,000)
	----------- Interest Paid	(20,000)
	Net Cash Flows from (used in) Financing Activities		4,90,000
D	Net Increase or Decrease in Cash and CashEquivalents		1,40,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		3,20,000
	Cash and Cash Equivalents at the end of the period		4,60,000

Working Note:

1

Non-Current Investments Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	2,00,000	By Bank A/c (80,000 + 16,000)	96,000
To Profit and Loss A/c (Profit)	16,000	By Balance c/d	2,70,000
To Bank A/c (Purchases-b/f)
	3,66,000		3,66,000

2.

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	14,00,000	By Acc. Depreciation A/c	1,10,000
To Bank A/c (Purchases-b/f)	8,80,000	By Bank A/c	20,000
		By Pand L A/c (Loss)	10,000
		By Balance c/d	21,40,000
	22,80,000		22,80,000

3

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Fixed Assets A/c	1,10,000	By Balance b/d	1,90,000
To Balance c/d	2,40,000	By Profit and Loss A/c (b/f)	1,60,000
	3,50,000		3,50,000

Chapter 5 - Cash Flow Statements Exercise 5. 118

Solution Ex. 56

Cash Flow Statement for the year ended March, 31, 2018
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	2,00,000
	----------- Preference Dividend	30,000
	----------- Profit Before Tax		2,30,000
	Items to be Added/Subtracted
	----------- Depreciation on FA	60,000
	----------- Interest on Debentures	30,000
	----------- Dividend on Equity Shares	45,000
	----------- Interest on Investments	(10,000)
	----------- Provision for Doubtful Debts	10,000
	----------- Loss on Sale of Fixed Assets	40,000	1,75,000
	Operating Profit before Working Capital Adjustments ---		4,05,000
	---- Less: Increase in Current Assets
	----------- Trade Receivables	(1,00,000)
	Inventories	(1,00,000)	(2,00,000)
	---- Add: Increase in Current Liabilities
	----------- Trade Payable	80,000	80,000
	Cash Generated from Operations		2,75,000
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		2,85,000
B	Cash Flow from Investing Activities
	----------- Sale of Fixed Assets	50,000
	Interest on Investment	10,000
	Purchase of Investment	(1,00,000)
	----------- Purchase of Fixed Asset	(2,50,000)
	Net Cash Flows from (used in) Investing Activities		(2,90,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue Equity Shares	2,00,000
	----------- Proceeds from Issue of Debentures	1,00,000
	----------- Securities Premium Reserve	10,000
	---------- Dividend paid on preference shares	(30,000)
	----------- Dividend paid on Equity	(45,000)
	----------- Redemption of Preference Shares	(1,00,000)
	----------- Interest on Debentures	(30,000)
	Net Cash Flows from (used in) Financing Activities		1,05,000
D	Net Increase or Decrease in Cash and CashEquivalents		1,00,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		70,000
	Cash and Cash Equivalents at the end of the period		1,70,000

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	6,00,000	By Depreciation A/c	60,000
To Bank A/c (Purchases-b/f)	2,50,000	By Bank A/c	50,000
		By Pand L A/c (Loss)	40,000
		By Balance c/d	7,00,000
	8,50,000		8,50,000

Chapter 5 - Cash Flow Statements Exercise 5. 119

Solution Ex. 57

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	82,500
	----------- Preference Dividend	12,000
	General Reserves (15,000 - 5,000 - 10,000)	0
	----------- Profit Before Tax		94,500
	Items to be Added/Subtracted
	----------- Depreciation on FA	35,000
	----------- Interest on Debentures	5,000
	----------- Premium on Redemption of Debentures	2,500
	----------- Interest on Investments	(1,500)
	----------- Provision for Doubtful Debts	2,500
	----------- Premium on Redemption of Pref. Shares	(2,500)
	----------- Loss on Sale of Fixed Assets	7,500	48,500
	Operating Profit before Working Capital Adjustments ---		1,43,000
	---- Less: Increase in Current Assets
	Trade Receivables	(50,000)
	---- Add: Decrease in Current Assets
	----------- Inventories	5,000
	---- Add: Increase in Current Liabilities
	----------- Trade Payable	37,500	(7,500)
	Cash Generated from Operations		1,29,500
	---- Less: Tax Paid	-
	Net Cash Flows from Operating Activities		1,35,500
B	Cash Flow from Investing Activities
	----------- Sale of Fixed Assets	12,500
	Interest on Investment	1,500
	Purchase of Investment	(25,000)
	----------- Purchase of Fixed Asset	(1,10,000)
	Net Cash Flows from (used in) Investing Activities		(1,21,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue Equity Shares	25,000
	----------- Proceeds from Issue of Debentures	50,000
	----------- Dividend paid on Pref. Shares	(12,000)
	---------- Premium on red. of preference shares	(2,500)
	----------- Dividend paid on Equity	(5,000)
	----------- Redemption of Preference Shares	(50,000)
	----------- Interest on Debentures	(5,000)
	Net Cash Flows from (used in) Financing Activities		500
D	Net Increase or Decrease in Cash and CashEquivalents		15,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		25,000
	Cash and Cash Equivalents at the end of the period		40,000

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	2,55,000	By Depreciation A/c	12,500
To Bank A/c (Purchases-b/f)	1,10,000	By Bank A/c	35,000
		By Pand L A/c (Loss)	7,500
		By Balance c/d	3,10,000
	3,65,000		3,65,000

Chapter 5 - Cash Flow Statements Exercise 5. 120

Solution Ex. 58

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (1,50,000 - (-1,40,000)	2,90,000
	----------- Provision for Tax	45,000
	General Reserves	30,000
	----------- Profit Before Tax		3,65,000
	Items to be Added/Subtracted
	----------- Depreciation on FA	60,000
	----------- Interest on Debentures (6,000 + 10,400)	16,400
	----------- Premium on Redemption of Pref. Shares	5,000
	----------- Interest on Bank Loan (2,000 + 1,600)	3,600
	----------- Goodwill w/off	25,000
	----------- Loss on Sale of Fixed Assets	20,000	1,30,000
	Operating Profit before Working Capital Adjustments ---		4,95,000
	---- Less: Increase in Current Assets
	Inventories	(95,000)
	---- Add: Increase in Current Liabilities
	----------- Trade Payable	10,000	(85,000)
	Cash Generated from Operations		4,10,000
	---- Less: Tax Paid	(35,000)
	Net Cash Flows from Operating Activities		3,75,000
B	Cash Flow from Investing Activities
	----------- Sale of Fixed Assets	20,000
	Purchase of Investment	(45,000)
	----------- Purchase of Fixed Asset	(3,40,000)
	Net Cash Flows from (used in) Investing Activities		(3,65,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue Equity Shares	1,00,000
	----------- Proceeds from Issue of Debentures	1,10,000
	----------- Securities Premium Reserve	10,000
	---------- Premium on red. of preference shares	(5,000)
	----------- Repayment of Bank Loan	(10,000)
	----------- Redemption of Preference Shares	(1,00,000)
	Interest on Bank Loan	(3,600)
	----------- Interest on Debentures	(16,400)
	Net Cash Flows from (used in) Financing Activities		85,000
D	Net Increase or Decrease in Cash and CashEquivalents		95,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		40,000
	Cash and Cash Equivalents at the end of the period		1,35,000

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	6,20,000	By Depreciation A/c	60,000
To Bank A/c (Purchases- b/f)	3,40,000	By Bank A/c	20,000
		By Pand L A/c (Loss)	20,000
		By Balance c/d	8,60,000
	9,60,000		9,60,000

Prov. For Tax Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Bank A/c (Tax Paid)	35,000	By Balance b/d	40,000
To Balance c/d	50,000	By Profit and Loss A/c (B/f)	45,000
	85,000		85,000

Chapter 5 - Cash Flow Statements Exercise 5.121

Solution Ex. 59

Cash Flow Statement for the year ended March 31, 2019
	Particulars		Amount ( Rs. )	Amount ( Rs. )
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss		1,80,000
	Provision for Tax		54,000	2,34,000
	Profit Before Taxation			2,34,000
	Items to be Added :
	Finance Cost			15,000
	Depreciation			80,000
	Operating Profit before Working Capital Adjustments			3,29,000
	Less : Increase in Current Assets
		Inventories	(65,000)
		Trade Receivables	(38,000)
	Add : Increase in Current Liabilities
	Creditors		47,000	(56,000)
	Cash Generated from Operations			2,73,000
	Less : Tax Paid			(40,000)
	Net Cash Flows from Operating Activities			2,33,000
B	Cash Flow from Investing Activities
		Purchase of Fixed Assets		(3,00,000)
	Net Cash Used in Investing Activities			(3,00,000)
C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			1,00,000
	Increase in Bank Overdraft			13,000
	Payment of Long Term Loan			(30,000)
	Finance Cost			(15,000)
	Net Cash Flow from Financing Activities			68,000
D	Net ↑/↓ in Cash and Cash Equivalents (A+B+C)			1,000
		Add : Cash and Cash Equivalent in the beginning of the period (20,000+45,000)		65,000
	Cash and Cash Equivalents at the end of the period (34,000+32,000)			66,000

Fixed Assets Account
Dr.		Cr.
Particulars	Amount ( Rs. )	Particulars	Amount ( Rs. )
Balance b/d	4,00,000	Depreciation A/c	80,000
Bank A/c ( Purchase- Bal. Fig. )	3,00,000	Balance c/d	6,20,000
	7,00,000		7,00,000

Chapter 5 - Cash Flow Statements Exercise 5.123

Solution Ex. 60

Cash Flow Statement for the year ended March, 31, 2019
	Particulars	Rs.	Rs.
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	8,00,000
	----------- Provision for Tax	3,45,000
	----------- Profit Before Tax		11,45,000
	Items to be Added/Subtracted
	----------- Depreciation on FA	40,000
	----------- Interest on Deposits	(15,000)
	----------- Dividend on Investments	(10,000)
	----------- Interest on Debentures	27,500
	Profit on sale of fixed asset	(10,000)	32,500
	Operating Profit before Working Capital Adjustments ---		11,77,500
	---- Less: Increase in Current Assets
	Outstanding Expenses Trade Receivables	(1,000) (2,50,000)
	---- Add: Increase in Current Liabilities
	----------- Trade Payables Inventories	20,000 1,00,000
	Cash Generated from Operations	10,46,500
	---- Less: Tax Paid (WN)	(3,10,000)
	Net Cash Flows from Operating Activities		7,36,500
B	Cash Flow from Investing Activities
	---------- Sale of Fixed Assets	30,000
	Purchase of Investment Interest on Deposits Dividend on Investments	(5,00,000) 15,000 10,000
	Net Cash Flows from (used in) Investing Activities		(4,45,000)
C	Cash Flow from Financing Activities
	----------- Proceeds from Issue Equity Shares	2,50,000
	----------- Proceeds from Issue of Debentures	5,00,000
	----------- Redemption of Debentures	(2,00,000)
	----------- Interest on Debentures	(12,500)
	Dividend Paid	(50,000)
	Interim Dividend Paid	(1,00,000)
	Net Cash Flows from (used in) Financing Activities		3,87,500
D	Net Increase or Decrease in Cash and CashEquivalents		6,79,000
	----------- Add : Cash and Cash Equivalent in the beginning of the period		1,95,000
	Cash and Cash Equivalents at the end of the period		8,74,000

Fixed Assets Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Balance b/d	9,90,000	By Depreciation A/c	80,000
To P and L A/c (Profit)	10,000	By Bank A/c	30,000
		By Balance c/d	8,90,000
	10,00,000		10,00,000

Accumulated Depreciation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Fixed Asset A/c	80,000	By Balance b/d	2,45,000
To Balance c/d	2,05,000	By Profit and Loss A/c	40,000
	2,85,000		2,85,000

Prov. For Tax Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To Bank A/c (Tax Paid)	3,10,000	By Balance b/d	2,25,000
To Balance c/d	2,60,000	By Profit and Loss A/c (B/f)	3,45,000
	5,70,000		5,70,000

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Foundations in Financial Management 12th Edition Chapter 5 Problems Solutions

Source: https://www.topperlearning.com/t-s-grewal-solutions/cbse-class-12-commerce-accountancy/analysis-of-financial-statements/cash-flow-statements

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