Worksheet-4 On CFS

WORKSHEET -4- ON CASH FLOW STATEMENT
1. From the following Balance Sheets of X Ltd., prepare the Cash Flow Statement.
Particulars Note 31.3.2018 31.3.2017

No.
1. EQUITY AND LIABILITIES
i. Shareholder’s funds
Share Capital 2,00,000 2,00,000
Reserve & Surplus 1,55,000 80,000
ii. Current Liabilities:
Trade Payables 1,28,000 1,45,000
Short-Term Provisions 1 45,000 35,000
TOTAL 5,28,000 4,60,000
2. ASSETS
i. Non- current Assets
Property, Plant and Equipment & Intangible Assets
(i) Property, Plant and Equipment 2 2,00,000 1,50,000
(ii) Intangible Assets 3 33,000 40,000
ii. Current Assets

(a) Current Investments 4 15,000 12,000
(b) Inventories 2,15,000 1,80,000
(c) Trade Receivables 50,000 60,000
(d) Cash & Bank Balances 10,000 8,000
(e) Other Current Assets 5 5,000 10,000
5,28,000 4,60,000
Notes to Accounts:
Particulars 31.3.2018 31.3.2017
1. Short term Provision:
Provision for Taxation 45,000 35,000
Property, Plant and Equipment:
Machinery 2,00,000 1,50,000
2. Intangible Assets:
Goodwill 33,000 40,000
3. Current Investments:
Marketable Securities 15,000 12,000
4. Other Current Assets:
Prepaid Expenses 5,000 10,000
Additional information:
1. Machinery whose original cost was Rs. 50,000 was sold for Rs. 10,000 during the
year. Accumulated depreciation on this machinery was Rs. 26,000.
2. Depreciation on Machinery charged during the year Rs. 20,000.
3. An Interim Dividend was paid during the year @ 10% on Equity share Capital.
Solution:
X Ltd.
CASH FLOW STATEMENT for the year ended 31.3.2018
Particulars Rs. Rs.

A. Cash Flows from Operating Activities:
Net Profit before Tax ( Note 1) 1,40,000

Adjustments for non-cash and non-operating items:
Add: Depreciation on Plant & Machinery 20,000
Loss on sale of Machinery 14,000
Goodwill written off 7,000 41,000
Operating Profit before Working Capital changes 1,81.000
Add: Decrease in Current Assets:
Trade Receivable 10,000
Prepaid Expenses 5,000 15,000
1,96,000
Less: Increase in Current Assets:
Inventory (35,000)
Less: Decrease in Current Liabilities:
Trade Payable (17,000) (52,000)
1,44,000
Less: Payment of Tax (for the year 2017) (35,000)
Net Cash from operating activities 1,09,000
1,09,000
B. Cash Flows from Investing activities:

Purchase of Plant & Machinery
(94,000)
Sale of Machinery
10,000
Net Cash used in Investing Activities
(84,000)
(84.000)
C. Cash flows from Financing Activities:

Interim Dividend Paid
(20,000)
Net Cash used in financing activities
(20,000)
Net increase in Cash & Cash Equivalents (A+B+C)
Add: Cash & Cash Equivalents in the beginning of the year 5,000
20,000
Cash and Cash Equivalents at the end of the year
25,000
Notes:
Calculation of Net Profit before Tax:
Reserve & Surplus Balance on 31st March, 2018 1,55,000
Less: Reserves & Surplus Balance on 31st March, 2017 80,000
75,000
Add: Interim Dividend Paid (10% on Rs. 2,00,000) 20,000
Provision for Tax made during the Current Year 45,000
Net Profit before Tax 1,40,000
PBITD
Less: Interest
PBT (This is our Destination) 1,40,000
Less: Tax 45,000
PAT 95,000
Less: Preference Dividend NIL
Profit available to Equity Dividend – (Equity Dividend; Interim Dividend; Proposed
Shareholders Dividend) = 20,000
+ Transfer to Reserve + Surplus (Balance of Statement of P/L)
= 75,000
Transfer to Reserves & Surplus during the year amounted to Rs. 75,000.
Add: Interim Dividend : Rs.20,000
Provision for Taxation a/c

Particulars Amount Particulars Amount
To Bank a/c 35,000 By balance b/d (Given) 35,000
To balance c/d (Given) 45,000 By Statement of P& L 45,000
80,000 80,000
Plant & Machinery a/c

(On WDV)
Particulars Amount Particulars Amount

To balance b/d (Given) 1,50,000 By Bank a/c 10,000
By Loss on sale 14,000
To bank a/c (Balancing 94,000 By Depreciation a/c 20,000
figure, being purchase)
By balance c/d (Given) 2,00,000
2,44,000 2,44,000
31.3.2018 31.3.2017
Cash & Cash Equivalents: Rs. Rs.
Cash and Bank balances 10,000 8,000
Marketable Securities 15,000 12,000
25,000 20,000
LIST OF CURRENT LIABILITIES & CURRENT ASSETS AS PER COMPANY BALANCE SHEET
FOR WORKING CAPITAL CHANGES IN CFS
CURRENT LIABILITIES
Short term Borrowings Bank Overdraft and Cash Credit X
Trade Payables Sundry Creditors + Bills Payable
Other Current Liabilities Outstanding Expenses; Pre receive Income
Short term Provisions Provision for Taxation; Provision for Doubtful
Debts; Provision for Repairs X
CURRENT ASSETS
Current Investments Marketable Securities; X
Inventories
Trade Receivables Sundry Debtors + Bills Receivable
Cash and Cash Equivalents Cash in Hand; Cash at Bank X
Other Current Assets Prepaid Expenses; Accrued Income

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WORKSHEET -4- ON CASH FLOW STATEMENT

Particulars Note 31.3.2018 31.3.2017

ii. Current Assets

CASH FLOW STATEMENT for the year ended 31.3.2018

Particulars Rs. Rs.

Net Profit before Tax ( Note 1) 1,40,000

B. Cash Flows from Investing activities:

C. Cash flows from Financing Activities:

Provision for Taxation a/c

Plant & Machinery a/c

Particulars Amount Particulars Amount

Cash and Bank balances 10,000 8,000

Marketable Securities 15,000 12,000

FOR WORKING CAPITAL CHANGES IN CFS

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