Sun Ltd

A Cash flow from Operating activities    

       
Incr in reserves & P-L
  Net profit after tax, dividends 2,00,000 account
Calculated on opening
  Add: ordinary Dividends 45,000 balance
Calculated on opening
  Add: Pref Dividends 30,000 balance
  Add: Provn for tax   No data - so ignored
  Add: Increase in provn for bad debts 10,000 Non cash item
  Add: Depreciation 60,000  
  Add: Loss on sale of Tangible assets 40,000  
Deb issued on 1st day of
  Add: Interest 30,000 year
Calculated on opening
  Less: Interest on 10% Investments -10,000 balance
       

  Changes in Working capital    

  + Inc in payables 80,000  
  - Inc. in inventories -1,00,000  
Consider the increase in
  - Inc. in receivables -1,00,000 gross receivables
       
       
       
       
       
    2,85,000  
       
     

B Cash flow from Investing activities  

   Purchase of Non current Inv -1,00,000
  Purchase of Tangible assets -2,50,000
  Sale of Tangible assets 50,000
  Interest from Inv @ 10% - Opg Balance 10,000
     
     
    -2,90,000
     
     

  Cash flow from Financing activities  

C    

  Ordinary shares issued 2,00,000

  Premium on issue of shares 10,000
  Redemption of 10% pref share capital -1,00,000

  15% Interim dividend paid (on opg bal) -45,000

  10% Debentures issued 1,00,000
  10% Preference dividend paid -30,000
  Interest paid -30,000
    1,05,000

D=A+B+
C Total Cash flow 1,00,000

E Opening cash and cash equivalents 70,000

F=E+D Closing cash and cash equivalents 1,70,000

Tangible Assets a/c

Bal b/d 6,00,000 Bank 50,000
    Loss 40,000
Bank (Bal
figure) 2,50,000 Depn 60,000
       
    Bal c/d 7,00,000

  8,50,000   8,50,000
Bal b/d 7,00,000    

Samta
A Cash flow from Operating activities    
       
Incr in reserves & P-L
  Net profit after tax, dividends 3,20,000 account
Add: Premium on redemption of
  pref 5,000  
  Add: Provn for tax 45,000  
  Add: Goodwill written off 25,000  
  Add: Depreciation 60,000  
  Add: Loss on sale of Tangible assets 20,000  
  Add Interest paid 20,000  
  Changes in Working capital    
  + Inc in payables 10,000  
  - Inc. in inventories -95,000  

       
       
       
       
  Less: Tax paid -35,000  
       
    3,75,000  

B Cash flow from Investing activities  

  Purchase of Non current Inv -45,000
  Purchase of Tangible assets -3,40,000

  Sale of Tangible assets 20,000

     
     
     
    -3,65,000
     
  Cash flow from Financing activities  
C    
  Ordinary shares issued 1,00,000
  Premium on issue of shares 10,000
  Redemption of 12% pref share capital -1,00,000
  Premium on redemption of pref shares -5,000
  8% Debentures issued 1,10,000
  Repayment of 8% short term loan -10,000
  Interest paid -20,000
    85,000

Provn for tax

     Bal b/d 40,000
       
Bank
(Bal By P&L
figure) 35,000 account 45,000
       

Bal c/d 50,000    

  85,000   85,000
    Bal b/d 50,000

Tangible Assets a/c

Bal b/d 6,20,000 Bank 20,000

    Loss 20,000
Bank
(Bal
figure) 3,40,000 Depn 60,000
       
    Bal c/d 8,60,000

  9,60,000   9,60,000

Interest calculations          
           
New Debentures issued on 1st Oct (Middle of acctg
year)          

Avg value of debentures     205000    

Interest     16400    
           
Avg value of loan     45000    
Interest     3600    
           
Total Interest     20000    

Problem4

A Cash flow from Operating  

 activities
     
  Profit before tax 2,20,000

  + Depreciation 80,000
  + Finance costs (Interest) 15,000
     
     
  Changes in Working capital  
  (-) Increase in invy -65,000
  (-) Increase in receivables -38,000
  + Increase in payables 47,000
     

     
     
  Income tax paid -26,000
     
     
    2,33,000
     

Cash flow from Investing

B activities  
  Fixed assets bought -3,00,000
     

     
     
     
     
    -3,00,000
     
     

C Cash flow from Financing activities  

  Finance costs -15,000

  Issue of shares 1,00,000

  Long term loan repaid -30,000
Interest paid(?? We don't know the rate of
  interest)  
     
     
    55,000

D=A+B+
C Total Cash flow -12,000
E Opening cash and cash equivalents 65,000
F=E+D Closing cash and cash equivalents 53,000
(We need to consider Bank OD as
  part of cash equivalents)  
     

Provn for tax

    Bal b/d 30,000

       
Bank
(Bal
figure) 26,000 By P&L account 40,000
       

Bal c/d 44,000    

  70,000   70,000

    Bal b/d 44,000

Fixed Assets a/c

4,00,00
Bal b/d 0    
       
Bank
(Bal 3,00,00
figure) 0 Depn 80,000
       

6,20,00
    Bal c/d 0

7,00,00 7,00,00
  0   0

6,20,00
Bal b/d 0