CASH FLOW STATEMENTS : Numerical Problems

Numerical Problems No.1

From the following information,prepare a Cash Flow Statement
Anurag Limited
Balance Sheet for the years 2019-20 and 2020-21
Equity and Libilites 2020-21 2019-20
1 Shareholders' Funds
Equity Share Caiptal 500,000 200,000
6% Prefernce Share Capital 50,000 100,000
Statement of Profit & Loss A/c 185,000 75,000
General Reserve 100,000 85,000
2 Non-current Liabilities
9% Debentures 50,000 75,000
5% Public Deposits 60,000 25,000
3 Current Liabilities
Trade Payables 90,000 65,000
Outstanding Expenses 5,000 12,000
Provision for Income Tax 35,000 40,000
Total 1,075,000 677,000

Assets 2020-21 2019-20

1 Non-current Assets
a) Fixed Assets (Tangible)
Land and Buildings 350,000 150,000
Plant and Machinery 157,500 175,000
Furniture 45,000 50,000
b) Fixed Assets (Intangible)
Goodwill 60,000 75,000
c) Non-current Investments 50,000
2 Current Assets
Trade Receivables 105,500 78,000
Inventory 81,500 42,000
Cash at Bank 131,500 39,000
Current Investments 75,000 15,000
Cash in hand 69,000 3,000
Total 1,075,000 677,000
Additional Information
During the year company bought another building for Rs 2,00,000.
Non-current Investments were sold at a profit of 20%
Depreciation was charged on Furniture and Machinery @ 10% p.a
Solution :

Working Notes :
1 Depreciation on Furniture = Rs 5,000
2 Depreciation on Plant & Machinery = Rs 17,500
3 Profit on sale of Investments = Rs 10,000

A Cash flow from Operating Activities

Net Profit as per Statement of Profit & Loss Account 110,000
Add : a) Transfer to General Reserve 15,000
b) Provision for Income Tax (CY) 35,000 50,000
Net Profit before Tax and Extra-ordinary items 160,000
Add : a) Goodwill written off 15,000
b) Depreciation written off : Plant & Machine 17,500
Furniture 5,000 37,500
Less : 197,500
a) Profit on sale of Non-current Investments 10,000

Operating Profit before working capital changes 187,500

Add :
a) Increase in Current Liabilities : Trade Payables 25,000 25,000
212,500
Less :
a) Decrease in Current Liabilities : O/s Expenses 7,000
b) Increase in Current Assets : Trade Receivables 27,500
Inventory 39,500 74,000
Less : 138,500
Income Tax paid (PY) 40,000
Cash flow from Operating Activities 98,500

B Cash flow from Investing Activities

a) Purchase of Buildings (200,000)
b) Sale of Non-current Investments 60,000
Cash flow used in Investing Activities (140,000)

C Cash flow from Financing Activities

a) Proceeds from Equity Share Capital 300,000
b) Redemption of 6% Prefence Share Capital (50,000)
c) Redemption of 9% Debentures (25,000)
d) Proceeds from 5% Public Deposits 35,000
Cash flow from Financing Activities 260,000
Net Increase in Cash and Cash Equivalents 218,500
( A + B + C )
Add :
Cash and Cash Euqivalents in the beginning 57,000
(Cash : 3,000+ Bank :39,000+ Investments: 15,000)
Cash and Cash Euqivalents at the end 275,500
(Cash : 69,000+ Bank :1,31,500+ Investments: 75,000)
Numerical Problems No.2
From the following information,prepare a Cash Flow Statement
Abhishek Limited
Balance Sheet for the years 2019-20 and 2020-21
Equity and Libilites 2020-21 2019-20
1 Shareholders' Funds
Equity Share Caiptal 175,000 75,000
Statement of Profit & Loss A/c 75,000 30,000
General Reserve 40,000 25,000
2 Non-current Liabilities
9% Debentures 30,000 50,000
3 Current Liabilities
Trade Payables 52,000 41,000
Commission received in advance 3,000 9,000
Provision for Income Tax 18,000 15,000
Total 393,000 245,000

Assets 2020-21 2019-20

1 Non-current Assets
a) Fixed Assets (Tangible)
Land and Buildings 150,000 60,000
Plant and Machinery 50,000
Furniture 75,000 20,000
b) Fixed Assets (Intangible)
Goodwill 35,000 40,000
2 Current Assets
Trade Receivables 67,000 31,000
Inventory 45,000 21,000
Cash at Bank 16,000 18,000
Cash in hand 5,000 5,000
Total 393,000 245,000
Solution :-
A Cash flow from Operating Activities
Net Profit as per Statement of Profit & Loss Account 45,000
Add : a) Transfer to General Reserve 15,000
b) Provision for Income Tax (CY) 18,000 33,000
Net Profit before Tax and Extra-ordinary items 78,000
Add : a) Goodwill written off 5,000 5,000
Operating Profit before working capital changes 83,000
Add :
a) Increase in Current Liabilities : Trade Payables 11,000 11,000
94,000
Less :
a) Decrease in Current Liabilities : Advance Income 6,000
b) Increase in Current Assets : Trade Receivables 36,000
Inventory 24,000 66,000
Less : 28,000
Income Tax paid (PY) 15,000
Cash flow from Operating Activities 13,000

B Cash flow from Investing Activities

a) Purchase of Buildings (90,000)
b) Sale of Plant & Machinery 50,000
c) Purchase of Furniture (55,000)
Cash flow used in Investing Activities (95,000)

C Cash flow from Financing Activities

a) Proceeds from Equity Share Capital 100,000
b) Redemption of 9% Debentures (20,000)
Cash flow from Financing Activities 80,000
Net Decrease in Cash and Cash Equivalents (2,000)
( A + B + C )
Add :
Cash and Cash Euqivalents in the beginning 23,000
(Cash : 5,000 and Bank :18,000)
Cash and Cash Euqivalents at the end 21,000
(Cash : 5,000+ Bank :16,000)
Numerical Problems No. 3
From the following information,prepare a Cash Flow Statement
Anuradha Limited
Balance Sheet for the years 2019-20 and 2020-21
Equity and Libilites 2020-21 2019-20
1 Shareholders' Funds
Equity Share Caiptal 220,000 100,000
Statement of Profit & Loss A/c 85,000 45,000
General Reserve 55,000 30,000
2 Non-current Liabilities
5% Public Deposits 50,000
3 Current Liabilities
Trade Payables 73,000 50,000
Provision for Income Tax 18,000 15,000
Total 501,000 240,000

Assets 2020-21 2019-20

1 Non-current Assets
a) Fixed Assets (Tangible)
Land and Buildings 250,000 75,000
Furniture 25,000 60,000
b) Fixed Assets (Intangible)
Goodwill 50,000 25,000
2 Current Assets
Trade Receivables 81,000 39,000
Inventory 58,000 21,000
Cash at Bank 19,000 20,000
Cash in hand 18,000
Total 501,000 240,000

Solution :-
A Cash flow from Operating Activities
Net Profit as per Statement of Profit & Loss Account 40,000
Add : a) Transfer to General Reserve 25,000
b) Provision for Income Tax (CY) 18,000 43,000
Net Profit before Tax and Extra-ordinary items 83,000
Add : Nil
Operating Profit before working capital changes 83,000
Add :
a) Increase in Current Liabilities : Trade Payables 23,000 23,000
106,000
Less :
b) Increase in Current Assets : Trade Receivables 42,000
Inventory 37,000 79,000
Less : 27,000
Income Tax paid (PY) 15,000
Cash flow from Operating Activities 12,000

B Cash flow from Investing Activities

a) Purchase of Buildings (175,000)
b) Purchase of Goodwill (25,000)
c) Sale of Furniture 35,000
Cash flow used in Investing Activities (165,000)

C Cash flow from Financing Activities

a) Proceeds from Equity Share Capital 120,000
b) Proceeds from Public Deposits 50,000
Cash flow from Financing Activities 170,000
Net Increase in Cash and Cash Equivalents 17,000
( A + B + C )
Add :
Cash and Cash Euqivalents in the beginning 20,000
(Cash : Nil and Bank :20,000)
Cash and Cash Euqivalents at the end 37,000
(Cash : 18,000+ Bank :19,000)