Financial Statement Sums - 230329 - 001857

1.
Name the major heads under which the following items will be presented in the Balance Sheet of a
company as per Schedule III of the Companies Act, 2013:
(i) Loose Tools. (ii) Unpaid Dividend.
(iii) Copyrights and Patents. (iv) Land and Building. (Delhi 2016 C)
[Ans.: (i) Current Assets; (ii) Current Liabilities; (iii) Non-current Assets; (iv) Non-current Assets.]
2. Identify the major heads under which the following items will be shown in the Balance Sheet of a
company as per Schedule III of Companies Act, 2013:
(i) Provision for Tax. (ii) Loan payable on demand.
(iii) Computer and related equipment. (iv) Goods acquired for trading. (AI 2016 C)
[Ans.: (i) Current Liabilities; (ii) Current Liabilities; (iii) Non-current Assets; (iv) Current Assets.]
3. Under which major headings the following items will be shown in the Balance Sheet of a company
as per Schedule III of the Companies Act, 2013:
(i) Trademarks;
(ii) Capital Redemption Reserve;
(iii) Income received in advance;
(iv) Stores and Spares;
(v) Office Equipments;
(vi) Current Investments?
[Ans.: (i) Non-current Assets; (ii) Shareholders’ Funds; (iii) Current Liabilities;
(iv) Current Assets; (v) Non-current Assets; (vi) Current Assets.]
4. State under which major headings and sub-headings the following items will be presented in the
Balance Sheet of a company as per Schedule III of the Companies Act, 2013:
(i) Capital Reserve; (ii) Calls-in-Advance;
(iii) Loose Tools; and (iv) Bank Overdraft. (AI 2017, Modified)
[Ans.:
Main Head (i) Shareholders‘ Funds (ii) Current Liabilities (iii) Current Assets (iv) Current Liabilities
Sub-head (i)
Reserves and Surplus (ii) Other Current Liabilities (iii) Inventories (iv) Short-term Borrowings]
5. A company has an opening credit balance in Surplus, i.e., Balance in Statement of Profit and Loss of
` 1,00,000. During the year, it earned a profit of ` 75,000. It decided to transfer ` 15,000 to Debentures
Redemption Reserve (DRR) and also proposed to pay dividend of ` 25,000.
How will be the appropriations shown in the financial statements?
[Ans. BALANCE SHEET (An Extract) as at...
Particulars Note No. `
I. EQUITY AND LIABILITIES
Shareholders’ Funds
Reserves and Surplus 1 1,75,000
1
Note to Accounts
Particulars `
1. Reserves and Surplus
Debentures Redemption Reserve
Opening Balance ...
Add: Transferred from Surplus, i.e., Balance in Statement of Profit and Loss 15,000 15,000
Surplus, i.e., Balance in Statement of Profit and Loss 1,00,000
Add: Profit transferred from Statement of Profit and Loss 75,000
1,75,000
Less: Transferred to Debentures Redemption Reserve 15,000 1,60,000
1,75,000
Contingent Liability: Company has proposed dividend of ` 25,000 for current year.]
6. Under which heads the following items are classified or shown on the Assets part of the Balance Sheet
of a company:
(i) Loose Tools;
(ii) Bills Receivable;
(iii) Sundry Debtors; and
(iv) Advances Recoverable in Cash?
[Ans.: (i) Loose Tools: Inventories under Current Assets; (ii) Bills Receivable: Trade Receivables under
Current Assets; (iii) Sundry Debtors: Trade Receivables under Current Assets; (iv) Advances Recoverable
in Cash: Short-term Loans and Advances under Current Assets.]
7. Under which heads the following items are shown in the Balance Sheet of a company:
(i) Calls-in-Arrears;
(ii) Commission Received in Advance;
(iii) Debentures;
(iv) Stores and Spare Parts;
(v) Land and Building;
(vi) Forfeited Shares Account?
[Ans.: (i) In the Note to Accounts on Share Capital under the main head Shareholders’ Funds
(Shown by way of deduction from Subscribed but not fully paid-up under Subscribed Capital);
(ii) Other Current Liabilities under Current Liabilities; (iii) Long term Borrowings under
Non-current Liabilities; (iv) Inventories under Current Assets; (v) Property, Plant and Equipment
and Intangible Assets—Property, Plant and Equipment under Non-current Assets;
(vi) In the Note to Accounts on Share Capital under the main head Shareholders’ Funds
(Shown by way of addition to Subscribed Capital).]
8. Under which head following revenue items of a financial company will be classified or shown:
(i) Gain (Profit) on Sale of Building;
(ii) Revenue from Project Consultancy Rendered;
(iii) Sale of Scrap;
(iv) Interest earned on Loans; and
(v) Gain (Profit) on Sale of Investments?
[Ans.: Revenue from Operations: (iv) Interest earned on Loans; (v) Gain (Profit) on
Sale of Investments; Other Income: (i) Gain (Profit) on Sale of Building;
(ii) Revenue from Project Consultancy Rendered; (iii) Sale of Scrap.]
2
9. Hero Ltd. has raised following long-term loans on 1st April, 2021:
10,000; 10% Debentures of ` 100 each redeemable in four equal yearly `
instalments beginning 1st July, 2022 10,00,000
11% Bank Loan from SBI repayable after 5 years 20,00,000
Interest on Debentures and Bank Loan has not yet been paid.
How will be the above items shown in the Balance Sheet of the company as at 31st March, 2022?
[Ans.: ` `
Long-term Borrowings : Loan from SBI 20,00,000
7,500; 10% Debentures of ` 100 each 7,50,000 27,50,000
Short-term Borrowings 2,500 Debentures of ` 100 each due for redemption 2,50,000
within 12 months from the date of Balance Sheet
Other Current Liabilities : Interest Accrued and Due on 10% Debentures 1,00,000
Interest Accrued and Due on Loan from SBI 2,20,000.]
3
1. From the following Balance Sheet of Depth Ltd. as at 31st March, 2022, prepare Comparative Balance Sheet:
Particulars Note No. 31st March, 31st March,
2022 (`) 2021 (`)

1. Shareholders’ Funds
(a) Share Capital 2,80,000 1,80,000
(b) Reserves and Surplus 1,00,000 1,00,000
2. Non-Current Liabilities
Long-term Borrowings 80,000 20,000
3. Current Liabilities
Trade Payables 50,000 30,000
Total 5,10,000 3,30,000
II. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment and Intangible Assets:
(i) Property, Plant and Equipment 2,80,000 1,80,000
(ii) Intangible Assets 50,000 30,000
(b) Non-Current Investments 80,000 50,000
2. Current Assets
(a) Inventories 70,000 30,000
(b) Cash and Cash Equivalents 30,000 40,000
Total 5,10,000 3,30,000
[Ans.:
Particulars Shareholders’ Funds NCL CL PPE & IA NCI CA
Absolute Change (` ) 1,00,000 60,000 20,000 1,20,000 30,000 30,000
Percentage Change (%) 35.71 300.00 66.67 57.14 60.00 42.86
]
2. Prepare Comparative Statement of Profit & Loss from the following Statement of Profit & Loss:
2022 (`) 2021 (`)
I. Income
Revenue from Operations (Net Sales) 3,00,000 2,50,000
II. Expenses
Cost of Materials Consumed 1,20,000 1,00,000
Changes in Inventories of WIP and Finished Goods (2,000) 5,000
Employees Benefit Expenses (Wages) 30,000 25,000
Other Expenses 22,000 20,000
Total 1,70,000 1,50,000
III. Net Profit (I – II) 1,30,000 1,00,000
[Ans.:
Particulars Revenue from Cost of Changes in Employees Other Expenses Net
Operations Mat. Cons. Inventories Ben. Exp. Expenses Profit
Absolute Change (`) 50,000 20,000 (7,000) 5,000 2,000 20,000 30,000
Percentage Change (%) 20.00 20.00 (140.00) 20.00 10.00 13.33 30.00
]
1
3. On the basis of the following information extracted from the Statement of Profit & Loss for the year
ended 31st March, 2013 and 2012, prepare a Comparative Statement of Profit & Loss:
Particulars 31st March, 31st March,

2013 2012
Revenue from Operations ` 30,00,000 ` 20,00,000
Expenses ` 21,00,000 ` 12,00,000
Other Income ` 3,60,000 ` 4,00,000
Tax Rate 50% 50%
(AI 2014 C)
[Ans.:
Particulars Revenue from Other Total Expenses Profit Profit
Operations Income Revenue before Tax after Tax
Absolute Change (`) 10,00,000 (40,000) 9,60,000 9,00,000 60,000 30,000
Percentage Change (%) 50.00 (10.00) 40.00 75.00 5.00 5.00
]
4. From the following Statement of Profit & Loss of Antriksh Ltd. for the year ended 31st March, 2012
and 2013, prepare a Comparative Statement of Profit & Loss:
2013 (`) 2012 (`)
Revenue from Operations 14,00,000 8,00,000
Other Incomes 6,00,000 4,00,000
Expenses 17,00,000 11,00,000

Rate of Income Tax was 40%. (Foreign 2014)
[Ans.:
Particulars Revenue from Other Income Total Revenue Expenses Profit before Tax Profit after Tax
Operations
Absolute Change (`) 6,00,000 2,00,000 8,00,000 6,00,000 2,00,000 1,20,000
Percentage Change (%) 75.00 50.00 66.67 54.55 200.00 200.00
]
5. From the following information, prepare Comparative Statement of Profit & Loss:
Particulars 31st March, 2020 31st March, 2019
Revenue from Operations ` 30,00,000 ` 20,00,000

Other Income (% of Revenue from Operations) 12% 20%
Expenses (% of Operating Revenue) 70% 60%
Tax Rate 40% 40%
[Ans.:
Particulars Revenue from Other Total Revenue Total Profit Tax Profit
Operations Income Expenses before Tax after Tax
Absolute Change (`) 10,00,000 (40,000) 9,60,000 9,00,000 60,000 24,000 36,000
Percentage Change (%) 50.00 (10.00) 40.00 75.00 5.00 5.00 5.00
]
2
6. From the following Statement of Profit & Loss, prepare Comparative Statement of Profit & Loss:
2020 (`) 2019 (`)
I. Income
Revenue from Operations (Net Sales) 20,00,000 17,50,000
Other Income 75,000 50,000
Total 20,75,000 18,00,000
II. Expenses
Purchases of Stock-in-Trade 11,60,000 10,00,000
Change in Inventories of Stock-in-Trade 10,000 (25,000)
Employees Benefit Expenses 1 3,00,000 3,00,000
Depreciation and Amortisation Expenses 50,000 50,000
Other Expenses 2 90,000 75,000
Total 16,10,000 14,00,000
III. Net Profit (I – II) 4,65,000 4,00,000
Notes to Accounts
2020 (`) 2019 (`)
1. Employees Benefit Expenses
Wages 3,00,000 3,00,000
2. Other Expenses
Administrative and General Expenses 70,000 50,000
Miscellaneous Expenses 20,000 25,000
90,000 75,000
[Ans.:
Particulars Revenue from Other Purchases of Change in Other Total Net
Operations Income Stock-in-Trade Inventories of Expenses Expenses Profit
Stock-in-Trade
Absolute Change (`) 2,50,000 25,000 1,60,000 35,000 15,000 2,10,000 65,000
Percentage Change (%) 14.29 50.00 16.00 140.00 20.00 15.00 16.25
]
7. From the following information, prepare Comparative Statement of Profit & Loss showing increase,
decrease and percentage:
Particulars 31st March, 2021 31st March, 2020
Cost of Materials Consumed ` 13,44,000 ` 6,00,000

Revenue from Operations (% of Materials Consumed) 125% 200%
Other Expenses (% of Operating Revenue) 10% 10%
Tax Rate 50% 50%
[Ans.:
Particulars Revenue from Operations Total Expenses Profit before Tax Tax Profit after Tax
Absolute Change (`) 4,80,000 7,92,000 (3,12,000) (1,56,000) (1,56,000)
Percentage Change (%) 40.00 110.00 (65.00) (65.00) (65.00)
]
3
8. Prepare Common-size Statement of Profit and Loss from the following information:
2022 (`) 2021 (`)
Other Income 1,00,000 50,000
Cost of Materials Consumed 15,00,000 10,00,000
Employees Benefit Expenses 3,00,000 2,00,000
Other Expenses 4,50,000 3,50,000
Additional Information: Other expenses include Provision for Tax of ` 2,00,000 for the year ending
31st March, 2021 and ` 2,50,000 for the year ending 31st March, 2022.
[Ans.: 31st March, 2021: Other Income = 2.5%; Total Revenue = 102.5%; Cost of Materials
Consumed = 50%; Employee Benefit Expenses = 10%; Other Expenses = 7.5%;
Total Expenses = 67.5%; Profit before Tax = 35%; Profit after Tax = 25%.
31st March, 2022: Other Income = 4%; Total Revenue = 104%;
Cost of Materials Consumed = 60%; Employee Benefit Expenses = 12%;
Other Expenses = 8%; Total Expenses = 80%; Profit before Tax = 24%;
Profit after Tax = 14%.]
4
1. On the basis of the following information, calculate Total Assets to Debt Ratio:
Particulars
` Particulars `
Capital Employed 50,00,000 Share Capital 35,00,000
Current Liabilities 20,00,000 10% Debentures 10,00,000
Land and Building 60,00,000 General Reserve 3,00,000
Trade Receivable 4,00,000 Surplus, i.e., Balance in Statement of
Cash and Cash Equivalents 5,00,000 Profit & Loss 2,00,000
Investment (Trade) 1,00,000
[Ans.: Total Assets to Debt Ratio = 7 : 1.]

[Hint: Long-term Debts = Capital Employed – Shareholders’ Funds.]
2. From the following information, calculate Proprietary Ratio:
BALANCE SHEET OF FORTUNE LTD. as at 31st March, 2022


(a) Share Capital 6,00,000
(b) Reserves and Surplus 1,50,000
(a) Trade Payables 1,00,000
(b) Other Current Liabilities 50,000
(c) Short-term Provisions (Provision for Tax) 1,00,000
Total 10,00,000
II. ASSETS
Property, Plant and Equipment and Intangible Assets:
Property, Plant and Equipment 5,00,000
2. Current Assets
(a) Current Investments 1,50,000
(b) Inventories 1,00,000
(c) Trade Receivables 1,50,000
(d) Cash and Cash Equivalents 1,00,000
Total 10,00,000
[Ans.: Proprietary Ratio = 0.75 : 1 or 75%.]

3. Calculate Current Ratio, Quick Ratio and Debt to Equity Ratio from the information given below:
Particulars `
Inventory 30,000
Prepaid Expenses 2,000
Other Current Assets 50,000
Current Liabilities 40,000
12% Debentures 30,000
Accumulated Profits 10,000
Equity Share Capital 1,00,000
Non-current Investments 15,000
[Ans.: Current Ratio = 2.05 : 1; Quick Ratio = 1.25 : 1; Debt to Equity Ratio = 0.27 : 1.]
1
4. Calculate Inventory Turnover Ratio from the data given below:
` `
Inventory in the beginning of the year 20,000 Carriage Inwards 5,000
Inventory at the end of the year 10,000 Revenue from Operations, i.e., Net Sales 1,00,000
Purchases 50,000
State the significance of this ratio.
[Ans.: Inventory Turnover Ratio = 4.33 Times.]
5. From the following information, calculate any two of the following ratios:
(i) Current Ratio; (ii) Debt to Equity Ratio; and (iii) Operating Ratio.
Revenue from Operations (Net Sales) ` 1,00,000; Cost of Revenue from Operations (Cost of Goods Sold)
was 80% of sales; Equity Share Capital ` 7,00,000; General Reserve ` 3,00,000; Operating Expenses
` 10,000; Quick Assets ` 6,00,000; 9% Debentures ` 5,00,000; Closing Inventory ` 50,000; Prepaid
Expenses ` 10,000 and Current Liabilities ` 4,00,000. (Foreign 2008)
[Ans.: Current Ratio = 1.65 : 1; Debt to Equity Ratio = 0.5 : 1; Operating Ratio = 90%.]
6. State, giving reasons, which of the following transactions would improve, reduce or not change the
Current Ratio, if Current Ratio of a company is (i) 1 : 1; or (ii) 0.8 : 1:
(a) Cash paid to Trade Payables.
(b) Purchase of Stock-in-Trade on credit.
(c) Purchase of Stock-in-Trade for cash.
(d) Payment of Dividend payable.
(e) Bills Payable discharged.
(f ) Bills Receivable endorsed to a Creditor.
(g) Bills Receivable endorsed to a Creditor dishonoured.
[Ans.: (i) (a) No Change; (b) No Change; (c) No Change; (d) No Change; (e) No Change;
(f) No Change; (g) No Change; (ii) (a) Reduce; (b) Improve; (c) No Change;
(d) Reduce; (e) Reduce; (f) Reduce; (g) Improve.]
7. Calculate Inventory Turnover Ratio in each of the following alternative cases:

Case 1: Cash Sales 25% of Credit Sales; Credit Sales ` 3,00,000; Gross Profit 20% on Revenue from
Operations, i.e., Net Sales; Closing Inventory ` 1,60,000; Opening Inventory ` 40,000.
Case 2: Cash Sales 20% of Total Sales; Credit Sales ` 4,50,000; Gross Profit 25% on Cost; Opening
Inventory ` 37,500; Closing Inventory ` 1,12,500. [Ans.: Case (1) 3 Times; Case (2) 6 Times.]
[Hint: Profit 25% of Cost = Profit 20% on Sales. Profit on Cost = 25/100 or 1/4 or 25%.
Let the Cost = ` 100; Profit = ` 25; Revenue from Operations, i.e., Net Sales = ` 125.
Profit on Sales = ` 25/` 125 = 1/5 or 20%.]
2
8. From the following Statement of Profit & Loss for the year ended 31st March, 2022 of Rex Ltd., calculate
Inventory Turnover Ratio:
STATEMENT OF PROFIT & LOSS for the year ended 31st March, 2022
I. Revenue from Operations (Net Sales) 6,00,000
II. Expenses:
(a) Purchases of Stock-in-Trade 3,00,000
(b) Change in Inventory of Stock-in-Trade 1 50,000
(c) Employees Benefit Expenses 60,000
(d) Other Expenses 2 45,000
Total Expenses 4,55,000
III. Profit before Tax (I – II) 1,45,000
IV. Less: Tax 45,000
V. Profit after Tax (III – IV) 1,00,000
Notes to Accounts
Particulars `
1. Change in Inventory of Stock-in-Trade
Opening Inventory 1,25,000
Less: Closing Inventory 75,000
50,000
2. Other Expenses
Carriage Inwards 15,000
Miscellaneous Expenses 30,000
45,000
[Ans.: Inventory Turnover Ratio = 3.65 Times.]

[Hint: Cost of Revenue from Operations (Cost of Goods Sold) = Purchases of Stock-in-Trade + Change
in Inventory of Stock-in-Trade + Carriage Inwards = ` 3,65,000.]
9. From the following particulars, determine Trade Receivables Turnover Ratio:
`
Revenue from Operations (Net Sales) 20,00,000
Credit Revenue from Operations (Credit Sales) 16,00,000
Trade Receivables 2,00,000
[Ans.: Trade Receivables Turnover Ratio = 8 Times.]
10. Following is the Balance Sheet of the Bharati Ltd. as at 31st March, 2022:
(a) Share Capital 7,50,000
(b) Reserves and Surplus:
Surplus, i.e., Balance in Statement of Profit & Loss:
Opening Balance 6,30,000
Add: Transfer from Statement of Profit & Loss 14,58,000 20,88,000
15% Long-term Borrowings 24,00,000
3. Current Liabilities 12,00,000
Total
64,38,000
3
II. ASSETS


—Property, Plant and Equipment
27,00,000
(b) Non-current Investments:
(i) 10% Investments 3,00,000
(ii) 10% Non-trade Investments 1,80,000
2. Current Assets
32,58,000
Total
64,38,000
You are required to calculate Return on Investment for the year ended 31st March, 2022 with reference
to Opening Capital Employed. [Ans.: Return on Investment (ROI) = 50%.]
[Hint: 10% Investments are Trade Investments.]
11. From the following information of Green Star Ltd., Calculate Debt to Equity Ratio:
` `
Trade Payables 3,00,000 Trade Receivables 3,00,000
Other Current Liabilities (12.5% of Current Assets) Net Fixed Assets 30,00,000
Total Debts 28,00,000 Long Term Loans and Advances 1,60,000
Other Quick Assets 80,000 Non-Current Investments 40,000
Prepaid Expenses 20,000 Opening Inventory 3,20,000
Note: Closing Inventory 25% more than Opening Inventory.

[Ans.: Debt to Equity Ratio = 2 : 1.]
[Hint: (i) Closing Inventory = ` 4,00,000; (ii) Current Assets = ` 8,00,000; (iii) Current Liabilities = ` 4,00,000;
(iv) Total Assets = ` 40,00,000; (v) Equity = Total Assets – Total Debts = ` 12,00,000; (vi) Long-term
Debts = ` 24,00,000.]
12. Calculate Revenue from Operations of King Ltd. from the following information:
Current Assets ` 20,00,000; Quick Ratio is 1.5 : 1; Current Ratio is 2 : 1; Inventory Turnover Ratio is
6 Times; Goods are sold at a profit of 25% on cost.
[Ans.: Revenue from Operations = ` 37,50,000.]

[Hint: Current Liabilities = ` 10,00,000; Quick Assets = ` 15,00,000; Inventory = ` 5,00,000; Cost of Revenue
from Operations = ` 30,00,000.]
13. Quick Ratio 1.5, Current Ratio 2, Total Current Assets ` 20,00,000, Inventory Turnover Ratio 6 Times.
Goods are sold on 20% Profit on Sales. Calculate Revenue from Operations.
[Ans.: Revenue from Operations = ` 37,50,000.]

[Hint: Current Liabilities = ` 10,00,000; Quick Assets = ` 15,00,000; Inventory = ` 5,00,000; Cost of Revenue
from Operations = ` 30,00,000.]
4
14. The motto of Yash Ltd., an advertising company is ‘Service with Dignity’. Its management and work force
is hard working, honest and motivated. The net profit of the company doubled during the year ended
31st March, 2014. Encouraged by its performance company decided to give one month extra salary to all
its employees. Following is the Comparative Statement of Profit & Loss of the company for the years ended
31st March, 2013 and 2014:
COMPARATIVE STATEMENT OF PROFIT & LOSS

Particulars Note 2012–13 2013–14 Absolute Percentage
No. ` ` Change (`) Change (%)
Revenue from Operations 10,00,000 15,00,000 5,00,000 50.00
Less: Employees Benefit Expenses 6,00,000 7,00,000 1,00,000 16.67
Profit before Tax 4,00,000 8,00,000 4,00,000 100.00
Less: Tax Rate 25% 1,00,000 2,00,000 1,00,000 100.00
Profit after Tax 3,00,000 6,00,000 3,00,000 100.00
Calculate Net Profit Ratio for the years ending 31st March, 2013 and 2014. (Delhi 2015, Modified)

Net Profit after Tax
[Ans.: Net Profit Ratio = ×100
Revenue from Operations
` 3,00 ,000
For the year ending 31st March, 2013 = ×100 = 30%;
`10 ,00 ,000
` 6 ,00 ,000
For the year ending 31st March, 2014 = 100 = 40%.]
`15 ,00 ,000
15. Wintex Products Ltd.

COMMON-SIZE STATEMENT OF PROFIT & LOSS
for the years ended 2021 and 2022
Particulars Note Absolute Amounts Percentage of Revenue from
No. Operations (Net Sales)
31st March, 31st March, 31st March, 31st March,
2021 (`) 2022 (`) 2021 (%) 2022 (%)
I. Revenue from Operations (Net Sales) 10,00,000 12,50,000 100.00 100.00

II. Expenses
(a) Purchases of Stock-in-Trade 7,20,000 8,70,000 72.00 69.60
(b) Change in Inventories of Stock-in-Trade 30,000 (20,000) 3.00 (1.60)
(c) Depreciation and Amortisation Expenses 20,000 30,000 2.00 2.40
(d) Other Expenses 30,000 50,000 3.00 4.00
Total Expenses 8,00,000 9,30,000 80.00 74.40
III. Profit before Tax (I – II) 2,00,000 3,20,000 20.00 25.60
IV. Less: Income Tax 60,000 96,000 6.00 7.68
V. Profit after Tax (III – IV) 1,40,000 2,24,000 14.00 17.92
From the above Common-size Statement of Profit & Loss for the years ended 31st March, 2021 and
31st March, 2022, compute Gross Profit Ratio.
5
[Ans.:
Gross Profit Ratio 31st March, 2021 31st March, 2022
Gross Profit ` 2 ,50 ,000 ` 6 ,17 ,500
= ×100 = ×100 = ×100
Revenue from Operations `10 ,00 ,000 ` 7 ,50 ,000
= 25% = 32%
Gross Profit: ` `
Less: Cost of Revenue from Operations 7,50,000 8,50,000
2,50,000 4,00,000
]
6
1. From the following Balance Sheet of Combiplast Ltd. for the year ended 31st March, 2022 and additional
information, calculate Cash Flow from Investing Activities:
2022 (`) 2021 (`)
(a) Share Capital 7,50,000 5,00,000
2. Current Liabilities 4,50,000 3,50,000
Total 22,00,000 17,00,000
II. ASSETS
Property, Plant and Equipment 1 12,00,000 12,00,000
(b) Non-Current Investments 5,00,000 3,00,000
2. Current Assets
(a) Trade Receivables 3,00,000 1,10,000
(b) Cash and Cash Equivalents 2,00,000 90,000
Total 22,00,000 17,00,000
Note to Accounts
2022 (`) 2021 (`)
1. Property, Plant and Equipment
Land 3,00,000 3,00,000
Building 4,00,000 4,00,000
Plant and Machinery 5,00,000 5,00,000
12,00,000 12,00,000
Additional Information: During the year the company sold machinery at Book Value of ` 1,50,000.
[Ans.: Cash Used in Investing Activities = ` 2,00,000.]
2. From the following Balance Sheet of Kumar Ltd. as at 31st March, 2022, prepare Cash Flow Statement:
2022 (`) 2021 (`)

(a) Share Capital 1 16,00,000 10,40,000
(b) Reserves and Surplus 2 5,50,000 2,60,000
Long-term Borrowings:
9% Debentures 4,00,000 6,00,000
Trade Payables 4,50,000 1,00,000
Total 30,00,000 20,00,000
II. ASSETS
—Property, Plant and Equipment (Machinery) 20,00,000 15,00,000
2. Current Assets
(a) Inventories 3,00,000 2,00,000
(b) Trade Receivables 2,00,000 1,00,000
(c) Cash and Cash Equivalents 5,00,000 2,00,000
Total 30,00,000 20,00,000
1
Notes to Accounts
2022 (`) 2021 (`)
1. Share Capital
Equity Share Capital 15,00,000 10,00,000
7% Preference Share Capital 1,00,000 40,000
16,00,000 10,40,000
General Reserve 4,00,000 60,000
Surplus, i.e., Balance in Statement of Profit & Loss 1,50,000 2,00,000
5,50,000 2,60,000
Additional Information:
1. During the year, a machinery costing ` 20,000 was sold for ` 6,000.
2. Dividend paid during the year ` 50,000. (Foreign 2008, Modified)
[Ans.: Cash Flow from Operating Activities = ` 5,58,000; Cash Used in Investing
Activities = ` 5,14,000; Cash Flow from Financing Activities = ` 2,56,000;
Net Increase in Cash and Cash Equivalents = ` 3,00,000.]
[Hint: Calculation of Net Profit before Tax and Extraordinary Items: `
Net Loss (50,000)
Add: Dividend Paid during the Year 50,000
Transfer to General Reserve 3,40,000
Net Profit before Tax and Extraordinary Items 3,40,000 .]
3. Following are the Balance Sheets of Krishtec Ltd. for the years ended 31st March, 2012 and 2011:
2012 (`) 2011 (`)

(a) Share Capital 12,00,000 8,00,000
(Surplus, i.e., Balance in Statement of Profit & Loss)
Long-term Borrowings 4,40,000 3,50,000
Trade Payables 60,000 50,000
Total 20,50,000 16,00,000
II. ASSETS
Property, Plant and Equipment 12,00,000 9,00,000
2. Current Assets
(a) Inventories 2,00,000 1,00,000
Total 20,50,000 16,00,000
Prepare a Cash Flow Statement after taking into account the following adjustments:
(a) The company paid interest ` 36,000 on its long-term borrowings.
(b) Depreciation charged on tangible fixed assets was ` 1,20,000. (AI 2013, Modified)
[Ans.: Cash Used in Operating Activities = ` 64,000; Cash Used in Investing Activities =
` 4,20,000; Cash Flow from Financing Activities = ` 4,54,000;
Net Decrease in Cash and Cash Equivalents = ` 30,000.]
2
4. Prepare Cash Flow Statement from the following Balance Sheet:
2013 2012
` `

(a) Share Capital 6,00,000 5,00,000
Trade Payables 2,80,000 1,80,000
Total 12,80,000 8,80,000
II. ASSETS
Property, Plant and Equipment (Machinery) 5,00,000 3,00,000
2. Current Assets
(a) Inventories 1,00,000 1,50,000
(c) Cash and Cash Equivalents 80,000 30,000
Total 12,80,000 8,80,000
Note to Accounts

2013 (`) 2012 (`)
(i) An old machinery having book value of ` 50,000 was sold for ` 60,000.
(ii) Depreciation provided on Machinery during the year was ` 30,000. (AI 2014 C)
[Ans.: Cash Flow from Operating Activities = ` 1,70,000; Cash Used in Investing
Activities = ` 2,20,000; Cash Flow from Financing Activities = ` 1,00,000.]
5. From the following Balance Sheet, prepare Cash Flow Statement:

2022 (`) 2021 (`)

(a) Share Capital 2,50,000 2,00,000
(b) Reserves and Surplus 1 90,600 80,500
(a) Short-term Borrowings: Bank Loan ... 70,000
(b) Trade Payables 1,35,200 1,50,000
(c) Short-term Provisions: Provision for Tax 35,000 30,000
Total 5,10,800 5,30,500
3
II. ASSETS
(i) Property, Plant and Equipment 2 3,59,000 3,50,000
(ii) Intangible Assets: Goodwill 5,000 ...
2. Current Assets
(a) Inventories 74,000 1,00,000
(b) Trade Receivables 64,200 80,000
(c) Cash and Cash Equivalents 8,600 500
Total 5,10,800 5,30,500
Notes to Accounts

2022 (`) 2021 (`)
General Reserve 60,000 50,000
Surplus, i.e., Balance in Statement of Profit & Loss 30,600 30,500
90,600 80,500
Land and Building 1,90,000 2,00,000
3,59,000 3,50,000

1. Proposed Dividend for the year ended 31st March, 2022 was ` 25,000 and for the year ended
31st March, 2021 was ` 14,000.
2. Interim Dividend paid during the year was ` 9,000.
3. Income Tax paid during the year ` 28,000.
4. Machinery was purchased during the year ` 33,000.
5. Depreciation to be charged on machinery ` 14,000 and on building ` 10,000.
[Ans.: Cash Flow from Operating Activities = ` 89,100; Cash Used in Investing Activities =
` 38,000; Cash Used in Financing Activities = ` 43,000.]
6. From the following Balance Sheet and information of Volvo Ltd., prepare Cash Flow Statement:

2022 (`) 2021 (`)

(a) Share Capital 1 2,25,000 2,50,000
(b) Reserves and Surplus 2 1,27,500 50,000
Long-term Borrowings: 10% Debentures 1,00,000 50,000
(a) Trade Payables 72,500 35,000
(b) Other Current Liabilities—Premium on Redemption of Preference Shares 2,500 5,000
Total 5,27,500 3,90,000
4
II. ASSETS
—Property, Plant and Equipment (Machinery) 3,10,000 2,55,000
(b) Non-current Investments (10% Investments) 40,000 15,000
2. Current Assets
(a) Current Investments 5,000 4,000
(b) Inventories 45,000 50,000
(c) Trade Receivables 3 92,500 45,000
(d) Cash and Cash Equivalents 4 35,000 21,000
Total 5,27,500 3,90,000
Notes to Accounts
2022 (`) 2021 (`)
1. Share Capital
Equity Share Capital 1,75,000 1,50,000
12% Preference Share Capital 50,000 1,00,000
2,25,000 2,50,000
General Reserve 10,000 15,000
Surplus, i.e., Balance in Statement of Profit & Loss 1,17,500 35,000
1,27,500 50,000
3. Trade Receivables
Sundry Debtors 1,00,000 50,000
Less: Provision for Doubtful Debts 7,500 5,000
92,500 45,000
4. Cash and Cash Equivalents
Cash in Hand 12,500 6,000
Cash at Bank 22,500 15,000
35,000 21,000
(i) You are informed that during the year:
Proposed Dividend: 31st March, 2022 31st March, 2021
Equity Share Capital Nil Nil
Preference Share Capital 12% 12%
(ii) A machine with a book value of ` 20,000 was sold for ` 12,500;
(iii) Depreciation charged during the year was ` 35,000;
(iv) Preference shares were redeemed on 31st March, 2021 at a premium of 5%;
(v) An interim dividend of ` 5,000 was paid on equity shares on 31st March, 2022 out of General Reserve;
(vi) Fresh equity shares were issued on 31st March, 2022; and
(vii) Additional investments were purchased on 31st March, 2022.
[Ans.: Cash Flow from Operating Activities = ` 1,35,500; Cash Used in
Investing Activities = ` 1,21,000; Cash Flow from Financing Activities = ` 500;
Net Increase in Cash and Cash Equivalents = ` 15,000.]
5
7. Prepare Cash Flow Statement from the following:
STATEMENT OF PROFIT & LOSS for the year ended 31st March, 2022
I. Revenue from Operations (Net Sales) 36,00,000
II. Expenses:
Purchases of Stock-in-Trade 28,16,000
Change in Inventories of Stock-in-Trade (65,000)
Finance Costs 15,000
Depreciation and Amortisation Expenses 80,000
Other Expenses 5,34,000
Total 33,80,000
III. Profit before Tax (I – II) 2,20,000
IV. Less: Provision for Tax 40,000
V. Profit after Tax (III – IV) 1,80,000
BALANCE SHEET as at 31st March, 2022

2022 (`) 2021 (`)

(a) Share Capital 6,00,000 5,00,000
Long-term Loan 1,20,000 1,50,000
(a) Short-term Borrowings: Bank Overdraft 13,000 ...
(b) Trade Payables (Creditors) 2,85,000 2,38,000
(c) Short-term Provisions: Provision for Tax 44,000 30,000
Total 13,62,000 10,38,000
II. ASSETS
Property, Plant and Equipment 6,20,000 4,00,000
2. Current Assets
(a) Short-term Investments (Marketable Securities) 34,000 20,000
(b) Inventories 3,28,000 2,63,000
(c) Trade Receivables 3,48,000 3,10,000
(d) Cash and Cash Equivalents 2 32,000 45,000
Total 13,62,000 10,38,000
Notes to Accounts
2022 (`) 2021 (`)
2. Cash and Cash Equivalents
Cash in Hand 32,000 17,000
Cash at Bank ... 28,000
32,000 45,000
[Ans.: Cash Flow from Operating Activities = ` 2,33,000; Cash Used in Investing Activities =
` 3,00,000; Cash Flow from Financing Activities = ` 68,000;
[Hint: Cash and Cash Equivalents = Cash in Hand + Cash at Bank + Short-term Investments.]
6
8. Compute Cash Flow from Operating Activities from the following:
Particulars Closing Opening
Balances (`) Balances (`)
Surplus, i.e., Balance in Statement of Profit & Loss 65,000 60,000

Trade Receivables:
Debtors 67,000 1,02,000
Bills Receivable 1,03,000 62,000
General Reserve 2,37,000 2,02,000
Provision for Depreciation 30,000 20,000
Outstanding Expenses 12,000 30,000
Goodwill 70,000 80,000
An asset costing ` 40,000 having book value of ` 28,000 was sold for ` 36,000.
[Ans.: Cash Flow from Operating Activities = ` 40,000.]
9. From the following Balance Sheet, prepare Cash Flow Statement:
BALANCE SHEET as at...

2022 (`) 2021 (`)

(a) Share Capital 2,50,000 2,00,000
(b) Reserves and Surplus (General Reserve) 70,000 50,000
Long-term Borrowings (12% Debentures) 80,000 1,00,000
(a) Trade Payables 1,60,000 60,000
(b) Other Current Liabilities 20,000 25,000
Total 5,80,000 4,35,000
II. ASSETS
(i) Property, Plant and Equipment 4,10,000 3,00,000
(ii) Intangible Assets (Goodwill) 2,000 10,000
2. Current Assets
(a) Inventories 90,000 70,000
(b) Trade Receivables 60,000 40,000
Total 5,80,000 4,35,000
[Ans.: Cash Flow from Operating Activities = ` 95,000; Cash Used in Investing Activities = ` 1,10,000;
Cash Flow from Financing Activities = ` 18,000;
7
10. The Balance Sheet of Virendra Paper Ltd. as at 31st March, 2022 is given below:

2022 (`) 2021 (`)


(a) Share Capital 7,20,000 6,00,000
(b) Reserves and Surplus:


Long-term Borrowings:
10% Debentures 2,70,000 4,50,000

Trade Payables 1,20,000 90,000
Total 15,90,000 15,15,000
II. ASSETS

—Property, Plant and Equipment 1 7,50,000 7,20,000
2. Current Assets

(a) Inventories 3,60,000 4,20,000

Total 15,90,000 15,15,000
Note to Accounts
2022 (`) 2021 (`)
Land 2,40,000 3,00,000
31st March, 31st March,
2022 (`) 2021(`)
Less: Accumulated Depreciation 2,40,000 1,80,000
5,10,000 4,20,000 5,10,000 4,20,000
7,50,000 7,20,000

1. Interim Dividend of ` 75,000 has been paid during the year.
2. Debenture Interest paid during the year ` 27,000.
You are required to prepare Cash Flow Statement.
[Ans.: Cash Flow from Operating Activities = ` 2,82,000; Cash Used in Investing Activities = ` 90,000;
Cash Used in Financing Activities = ` 1,62,000; Net Increase in Cash and Cash Equivalents = ` 30,000.]
8
11. Following is the Balance Sheet of Akash Ltd. as at 31st March, 2014:
2014 (`) 2013 (`)
(a) Share Capital 15,00,000 14,00,000
Long-term Borrowings 2,00,000 1,25,000
(a) Short-term Borrowings 2 12,000 10,000
(b) Trade Payables 15,000 83,000
(c) Short-term Provisions 3 18,000 11,000
Total 19,95,000 17,39,000
II. ASSETS
(ii) Intangible Assets 5 50,000 30,000
2. Current Assets
(b) Inventories 37,000 59,000
(c) Trade Receivables 26,000 23,000
(d) Cash and Cash Equivalents 14,000 12,000
Total 19,95,000 17,39,000
Notes to Accounts
2014 (`) 2013 (`)
2. Short-term Borrowings
Bank Overdraft 12,000 10,000
3. Short-term Provisions
Provision for Tax 18,000 11,000
Machinery 20,00,000 17,00,000
Less: Accumulated Depreciation (1,40,000) (90,000)
18,60,000 16,10,000
5. Intangible Assets
Patents 50,000 30,000
(i) Tax paid during the year amounted to ` 16,000.
(ii) Machine with a net book value of ` 10,000 (Accumulated Depreciation ` 40,000) was sold for ` 2,000.
Prepare Cash Flow Statement. (CBSE Sample Paper 2016)
[Ans.: Cash Flow from Operating Activities = ` 1,96,000; Cash Used in Investing Activities = ` 3,68,000;
Cash Flow from Financing Activities = ` 1,77,000; Net Increase in Cash and Cash Equivalents = ` 5,000.]
9
12. From the following Balance Sheet as at 31st March, 2022 and Statement of Profit & Loss for the year ended
31st March, 2022 of RSB Ltd. and additional information, prepare Cash Flow Statement:
2022 (`) 2021 (`)

(a) Share Capital 7,50,000 5,00,000
Long-term Borrowings (5% Debentures) 7,00,000 4,00,000
(a) Trade Payables 1,10,000 90,000
(b) Other Current Liabilities 2 39,000 25,000
(c) Short-term Provisions (Provision for Tax) 2,60,000 2,25,000
Total 28,09,000 15,40,000
II. ASSETS
—Property, Plant and Equipment 3 6,85,000 7,45,000
(b) Non-current Investments 7,50,000 2,50,000
2. Current Assets
(a) Current Investments 6,74,000 95,000
(b) Inventories 1,00,000 2,00,000
(c) Trade Receivables 4,00,000 1,50,000
(d) Cash and Cash Equivalents 2,00,000 1,00,000
Total 28,09,000 15,40,000
STATEMENT OF PROFIT & LOSS

for the year ended 31st March, 2022
2022 (`) 2021 (`)
I. Revenue from Operations 4 40,00,000 35,00,000

II. Other Income 5 35,000 30,000
III. Total Revenue (I + II) 40,35,000 35,30,000
IV. Expenses:
Purchases of Stock-in-Trade 27,00,000 24,70,000
Change in Inventories of Stock-in-Trade 6 1,00,000 50,000
Finance Cost 27,500 20,000
Depreciation 40,000 45,000
Other Expenses 22,500 20,000
Total Expenses 28,90,000 26,05,000
V. Profit before Tax (III – IV) 11,45,000 9,25,000
VI. Less: Tax 3,45,000 2,25,000
VII. Profit after Tax (V – VI) 8,00,000 7,00,000
10
Notes to Accounts

2022 (`) 2021 (`)

Debentures Redemption Reserve 1,00,000 1,00,000
9,50,000 3,00,000
2. Other Current Liabilities
Interest on Debentures 35,000 20,000
Outstanding Expenses 4,000 5,000
39,000 25,000
Machinery (Cost) 8,90,000 9,90,000
Less: Accumulated Depreciation 2,05,000 2,45,000
6,85,000 7,45,000
4. Revenue from Operations
Sales 42,00,000 35,75,000
Less: Sales Return 2,00,000 75,000
40,00,000 35,00,000
5. Other Income
Interest on Deposits 15,000 12,500
Dividend on Investments 10,000 17,500
Gain (Profit) on Sale of Fixed Assets 10,000 ...
35,000 30,000
6. Change in Inventories of Stock-in-Trade
Opening Stock 2,00,000 2,50,000
Less: Closing Stock 1,00,000 2,00,000
1,00,000 50,000
(i) Additional debentures were issued on 1st October, 2021 of ` 5,00,000. On the same date, part of outstanding
debentures were redeemed and interest was paid, whereas interest on outstanding debentures was paid
on 10th April, 2022.
(ii) Board of Directors proposed dividend in both the years @ 10%.
(iii) Interim Dividend of ` 1,00,000 was paid during the year.
(iv) A machinery with original cost of ` 1,00,000 on which depreciation till date was provided of ` 80,000 was
sold at a profit of ` 10,000.
[Ans.: Cash Flow from Operating Activities = ` 7,36,500; Cash Used in Investing Activities =
` 4,45,000; Cash Flow from Financing Activities = ` 3,87,500;
Net Increase in Cash and Cash Equivalents = ` 6,79,000.]
11
13. From the following information, calculate Net Profit before Tax and Extraordinary Items: `
Opening Surplus, i.e., Balance in Statement of Profit & Loss (2,00,000)
Closing Surplus, i.e., Balance in Statement of Profit & Loss 6,72,000
Dividend paid in current year (Last year’s proposed dividend) 1,44,000
Interim Dividend paid during the year 1,80,000
Transfer to Reserve 2,00,000
Provision for Tax for the current year 3,00,000
Refund of Tax 6,000
Loss due to Earthquake 4,00,000
Insurance proceeds from earthquake disaster settlement 2,00,000
[Ans.: Net Profit Tax and Extraordinary Items = ` 18,90,000.]
[Hint: Net Profit for the year = ` 6,72,000 + ` 2,00,000 (Loss) = ` 8,72,000.]
14. From the following Balance Sheet of SRS Ltd. and the additional information as on 31st March, 2022,
prepare a Cash Flow Statement:
SRS Ltd.
BALANCE SHEET
as on 31st March, 2022
2022 (`) 2021 (`)

(a) Share Capital 4,50,000 3,50,000
(b) Reserves and Surplus 1 1,25,000 50,000
Long-term Borrowings 2 2,25,000 1,75,000
(a) Short-term Borrowings 3 75,000 37,500
(b) Short-term Provisions 4 1,00,000 62,500
Total 9,75,000 6,75,000
II. ASSETS
(a)
(ii) Intangible 6 50,000 75,000
(b) Non-current Investments 75,000 50,000
2. Current Assets
(b) Inventories 7 61,000 36,000
Total 9,75,000 6,75,000
12
Notes to Accounts

2022 (`) 2021 (`)
Surplus, i.e., Balance in Statement of Profit & Loss 1,25,000 50,000
2. Long-term Borrowings
12% Debentures 2,25,000 1,75,000
3. Short-term Borrowings
Bank Overdraft 75,000 37,500
4. Short-term Provisions
Provision for Tax 1,00,000 62,500
Machinery 8,37,500 5,22,500
Accumulated Depreciation (1,05,000) (70,000)
7,32,500 4,52,500
6. Intangible Assets
Goodwill 50,000 75,000
7. Inventories
Stock-in-Trade 61,000 36,000
(i)
` 50,000, 12% Debentures were issued on 31st March, 2022.
(ii) During the year, a piece of machinery costing ` 40,000, on which accumulated depreciation was
` 20,000, was sold at a loss of ` 5,000. (AI 2017, Modified)
[Ans.: Cash Flow from Op0erating Activities = ` 1,93,500; Cash Used in Investing Activities = ` 3,65,000;
Cash Flow from Financing Activities = ` 1,66,500; Net Decrease in
Cash and Cash Equivalents = ` 5,000.]
13

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1.

I. EQUITY AND LIABILITIES

Particulars 31st March, 31st March,

Revenue from Operations ` 30,00,000 ` 20,00,000

Cost of Materials Consumed ` 13,44,000 ` 6,00,000

[Ans.: Total Assets to Debt Ratio = 7 : 1.]

2. From the following information, calculate Proprietary Ratio:

BALANCE SHEET OF FORTUNE LTD. as at 31st March, 2022

I. EQUITY AND LIABILITIES

[Ans.: Proprietary Ratio = 0.75 : 1 or 75%.]

[Ans.: Inventory Turnover Ratio = 4.33 Times.]

7. Calculate Inventory Turnover Ratio in each of the following alternative cases:

Profit on Sales = ` 25/` 125 = 1/5 or 20%.]

[Ans.: Inventory Turnover Ratio = 3.65 Times.]

[Hint: 10% Investments are Trade Investments.]

Note: Closing Inventory 25% more than Opening Inventory.

COMPARATIVE STATEMENT OF PROFIT & LOSS

15. Wintex Products Ltd.

I. Revenue from Operations (Net Sales) 10,00,000 12,50,000 100.00 100.00

I. EQUITY AND LIABILITIES

I. EQUITY AND LIABILITIES

I. EQUITY AND LIABILITIES

Particulars 31st March, 31st March,

5. From the following Balance Sheet, prepare Cash Flow Statement:

Particulars Note No. 31st March, 31st March,

I. EQUITY AND LIABILITIES

Particulars 31st March, 31st March,

Particulars Note No. 31st March, 31st March,

I. EQUITY AND LIABILITIES

BALANCE SHEET as at 31st March, 2022

I. EQUITY AND LIABILITIES

Surplus, i.e., Balance in Statement of Profit & Loss 65,000 60,000

9. From the following Balance Sheet, prepare Cash Flow Statement:

BALANCE SHEET as at...

I. EQUITY AND LIABILITIES

Particulars Note No. 31st March, 31st March,

I. EQUITY AND LIABILITIES

I. EQUITY AND LIABILITIES

STATEMENT OF PROFIT & LOSS

I. Revenue from Operations 4 40,00,000 35,00,000

Particulars 31st March, 31st March,

1. Reserves and Surplus

I. EQUITY AND LIABILITIES

Particulars 31st March, 31st March,

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