NRTI PoA- QUIZ 2 Time: 40 Minutes

Alpha Manufacturing Ltd. (AML) – Cash flow

AML is a dividend-paying company and its balance sheet as of 31st March 2017
and 2018 is given in Exhibit 1.

For the year 2017-18, the following information was available:

1. Profit before tax for the year was 500,000. The depreciation expense during
the year was 128,000.
2. The principal amount of the loan was repayable in 5 equal annual
instalments along with the interest accrued during the year. AML paid the
required amounts on 31st March 2018.
3. Few items of equipment having an original cost/value of 60,000 and
accumulated depreciation of 12,000 were sold for a profit of 4,000 on 1st
April 2017.
4. The advance tax of 101,000 was paid for F.Y. 2017-18.
5. AML purchased land for 200,000 and paid 50,000 as cash down payment.
For the balance amount of 150,000, it issued shares.
6. The dividend of 50,000 was declared for 2017-18.

Required: Prepare the cash flow statement for the period ended on 31st March
2018 using the indirect method. The blank answer sheet is provided with this
paper.
Exhibit 1: Alpha Manufacturing Ltd. (AML) - Balance Sheet as of 31st
March……
Assets 2018 2017
(a) Non-current:
Land 200000 -
74000 60000
Property, plant & equipment - Gross 0 0
23600 12000
Less: Accumulated depreciation 0 504000 0 480000
Investments 250000 250000
(b) Current:
72000 56500
Cash 0 0
10000
Advance Tax paid 0 60000
25000 25000
Receivables - gross 0 0
Less: Provision for bad debts -5000 -5000
15000 121500 10000
Inventories 0 0 0 970000

216900
TOTAL 0 1700000
Liabilities
(a) Non-current:
Equity:
50000 40000
Share Capital (face value Rs. 10) 0 0
25000 20000
Share premium 0 0
54900 129900 20000
Retained earnings 0 0 0 800000
12% Loan 320000 400000
(b) Current:
40000 40000
Accounts Payable 0 0
10000
Income Tax Payable 0 60000
Dividend Payable 50000 550000 40000 500000

216900
TOTAL 0 1700000
NSB-PGDM(EM) -2019 FRA Quiz 2 Time: 40 Minutes

Name: Kshitij Anand Section: MBA SCM Roll No. 214041

Alpha Manufacturing Ltd. – Cash Flow statement
Particulars Detail Detail Amount
(A) CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax/Losses 500000
Adjustments before working capital changes
Depreciation 1,28,000
Less: Gain from Sale of equipment (4000)
Less: Advance tax payment (1,01,000)
Change in inventory (50,000)
interest on loan 48,000

Net cash generated from/used in operating

activities (A) 5,21,000
(B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of land (50,000)
Equipment sold 52,000
Asset purchased (2,00,000)

Net cash generated from/used in investing

activities (B) (198000)
(C) CASH FLOW FROM FINANCING ACTIVITIES
Loan (80,000)
Dividend Paid (40,000)
interest paid (48000)
Net cash generated from/used in financing
activities (C) (1,68,000)
Net changes in cash and cash equivalents
during the year (A+B+C) 1,55,000
Opening Balance of cash and cash equivalents 5,65,000
Closing balance of cash and cash equivalents 7,20,000