SANJEEV CLASSES SANJEEV SIR

SANJEEV CLASSES
CASH FLOW STATEMENT
Question:- 1 From the following information, prepare the Cash Flow statement:

31st March 2008 31st March 2009 31st March 2008 31st March 2009
Liabilities (Rs.) (Rs.) Assets (Rs.) (Rs.)
Share Capital 2,00,000 2,50,000 Fixed Assets 1,17,000 2,74,000
Profit and Loss Long-Term
A/c 1,00,000 1,95,000 Investments 55,000 68,000
15%
Debentures 50,000 80,000 Stock 1,50,000 2,06,000
sundry
creditors 1,10,000 1,50,000 Debtors 70,000 32,000
Bills Payable 20,000 12,000 Cash 20,000 25,000
Bank 50,000 70,000
Preliminary
Expenses 18,000 12,000
4,80,000 6,87,000 4,80,000 6,87,000
Cash From Operating Activities- Rs. 1,22,500; Cash used in Investing Activities – Rs. 1,70,000; and Cash
from financing Activities- Rs. 1,70,000;]

Question:- 2 Following are the Balance Sheets of Good Luck Ltd. Prepare the Cash Flow
Statement:

1st April 2008 31st March 2009 1st April 2008 31st March 2009
Liabilities (Rs.) (Rs.) Assets (Rs.) (Rs.)
Equity Share
Capital 3,00,000 4,00,000 Goodwill 60,000 45,000
Profit and Loss A/c 50,000 60,000 Plant 1,72,000 2,96,000
Inventories(Stock
Mortgage Loan 1,00,000 1,30,000 ) 2,00,000 2,80,000
Public Deposits 70,000 10,000 Debtors 1,20,000 92,000
Creditors 1,05,000 1,40,000 Prepaid Insurance 10,000 15,000
Outstanding Share Issue
Expenses 20,000 8,000 Expenses 3,000 2,000
cash 50,000 16,000
Bank 30,000 2,000
6,45,000 7,48,000 6,45,000 7,48,000
[Cash From Operating Activities- Rs.8,000, Cash used in Investing Activities- Rs. 1,24,000, Cash from
financing Activities- Rs.70,000]

Question:- 3 The Following are the Balance Sheets of Agrawal Limited as on 31st March,2008
and 2009:

Liabilities 2008 Rs. 2009 Rs. Assets 2008 Rs. 2009 Rs.
Share Capital 2,00,000 2,00,000 Fixed Assets 2,20,000 3,75,000
Profit and Loss A/c 20,000 1,25,000 Less: 36,000 52,000

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 Accumulated
Mortgage Loan 50,000 75,000 Depreciation
Provision for Tax 10,000 15,000 1,84,000 3,23,000
Proposed Dividend 20,000 28,000 Stock 50,000 72,000
Creditors 70,000 36,000 Debtors 60,000 51,000
Bills Receivable 15,000 -
Prepaid Expenses 2,000 -
Cash and Bank 59,000 33,000
3,70,000 4,79,000 3,70,000 4,79,000
You are required to prepare the Cash Flow Statement.
[Cash From Operating Activities- Rs.1,24,000; Cash used in Investing Activities- Rs. 1,55,000; Cash from
financing Activities- Rs.5,000]

Question:- 4 From the following Balance Sheets of A Ltd. Make out the cash Flow Statement:

Liabilities 31st 31st Assets

March March 31st March 31st March
2008 Rs. 2009 Rs. 2008 Rs. 2009 Rs.
Plant and
Share Capital 80,000 80,000 Machinery 2,00,000 1,50,000
Less:
Profit and Loss A/c 30,000 80,000 Accumulated
15% 75,000 - Depreciation 50,000 60,000
Creditors 46,000 90,000 1,50,000 90,000
Provision for
Taxation 12,000 15,000 Stock 80,000 1,20,000
Proposed Dividend 20,000 30,000 Debtors 50,000 86,000
Bank Overdraft 37,000 25,000 Bills Receivable 15,000 11,000
Cash 5,000 13,000
3,00,000 3,20,000 3,00,000 3,20,000
Note:- Loan was paid on 1st April, 2008.
[Cash From Operating Activities- Rs.65,000; Cash used in Investing Activities- Rs. 50,000; Cash used in
financing Activities- Rs.95,000, Net increase in cash and cash equivalents-Rs.20,000*]

Question:- 5 From the following Balance Sheets of B Limited make out the cash Flow
Statement as perAS-3(Revised):

Liabilities 2008 Rs. 2009 Rs. Assets 2008 Rs. 2009 Rs.
Equity Share
Capital 2,50,000 2,80,000 Goodwill 60,000 42,000
12% Debentures 30,000 - Land & Building 2,00,000 50,000
General Reserve 1,00,000 1,25,000 Plant and Machinery 1,50,000 3,15,000
Investments(Long-
Profit and Loss A/c 40,000 67,000 term) 62,000 30,000
Provision for Tax 22,000 30,000 Stock 1,20,000 80,000
Creditors 1,76,000 83,000 Debtors 66,000 1,00,000
Outstanding Preliminary
Expenses - 10,000 Expenses 20,000 -
Bank Overdraft 70,000 40,000 Cash 10,000 18,000
6,88,000 6,35,000 6,88,000 6,35,000
[Cash From Operating Activities- Rs.21,000; Cash From Investing Activities- Rs. 17,000; Cash From financing
Activities-Nil.]

Preparation of cash flow statement (With Adjustment)

Question:- 6 From the following Balance Sheets of Vivek Ltd. Prepare the cash Flow
Statement:

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 Liabilities 2007 Rs. 2008 Rs. Assets 2007 Rs. 2008 Rs.
Equity Share Capital 2,00,000 2,50,000 Goodwill 30,000 20,000
12% Preference Share
Capital 50,000 40,000 Building 1,00,000 80,000
General Reserve 35,000 55,000 Plant 40,000 70,000
Profit and Loss A/c 15,000 17,000 Debtors 1,20,000 1,60,000
Creditors 23,000 5,000 Stock 18,000 20,000
Cash 15,000 17,000
3,23,000 3,67,000 3,23,000 3,67,000
Depreciation charged on Plant was Rs. 30,000 and on Buildings Rs. 50,000.
[Cash From Operating Activities- Rs.52,000; Cash ‘used in Investing Activities- Rs. 90,000; Cash From financing
Activities-40,000.]

Question:- 7 From the following Balance Sheets of Rajan Ltd. Prepare the cash Flow
Statement:

Liabilities 2007 (Rs.) 2008 (Rs.) Assets 2007 (Rs.) 2008 (Rs.)
Equity Share Capital 2,25,000 2,50,000 Goodwill 36,000 20,000
General Reserve 20,000 35,000 Building 80,000 60,000
Profit and Loss A/c 15,000 24,000 Plant 40,000 1,00,000
Creditors 37,000 49,500 Debtors 1,19,000 1,54,500
Stock 10,000 15,000
Cash 12,500 9,000
2,97,500 3,58,500 2,97,500 3,58,500
Depreciation charged on Plant was Rs. 10,000 and on Buildings Rs. 60,000.
[Cash Flow From Operating Activities- Rs.81,500; Cash ‘used in Investing Activities- Rs. 1,10,000; Cash From
financing Activities-25,000.]

Question:- 8 From the following Comparative Balance Sheets , Prepare the cash Flow
Statement for the year ended 31st March,2008:

31st 31st
March March 31st March 31st March
Liabilities 2007 Rs. 2008 Rs. Assets 2007 Rs. 2008 Rs.
Creditors 40,000 44,000 Cash 10,000 7,000
Loan From X 25,000 - Debtors 30,000 50,000
Loan From Bank 40,000 50,000 Stock 40,000 25,000
Capital 1,25,000 1,53,000 Machinery 80,000 55,000
Land 35,000 50,000
Building 35,000 60,000
2,30,000 2,47,000 2,30,000 2,47,000
During the year , a machine costing Rs. 10,000 with accumulated depreciation of Rs. 3,000 was
sold for Rs. 5,000. [Cash Flow From Operating Activities- Rs.47,000; Cash ‘used in Financing
Activities- Rs. 15,000; Cash used in Investing Activities-35,000

Question:- 9 From the following Details relating to the Accounts of Grow More Ltd. Prepare
Cash Flow Statement.

31.3.2002 31.3.2001 31.3.2002 31.3.2001

(Rs.) (Rs.) (Rs.) (Rs.)
Liabilities: Assets:
Plant and
Share Capital 10,00,000 8,00,000 Machinery 7,00,000 5,00,000
Reserve 2,00,000 1,50,000 Land/Building 6,00,000 4,00,000
Profit and loss
Account 1,00,000 60,000 Investments 1,00,000 -
Debentures 2,00,000 - Sundry Debtors 5,00,000 7,00,000
Provision for
dividend 1,00,000 70,000 Stock 4,00,000 2,00,000
Cash on
Proposed dividend 2,00,000 1,00,000 hand/bank 2,00,000 2,00,000
Sundry Creditors 7,00,000 8,20,000

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 25,00,000 20,00,000 25,00,000 20,00,000

Other Information:

1. Depreciation @25% was charged on the opening value of plant and Machinery.

2. During the year one old machine costing 50,000 (WDV 20,000) was sold for Rs. 35,000.

3. Rs.50,000 was paid towards Income tax during the year.

4. Building under construction was not subject to any depreciation.

Question:- 10 The following summary cash account has been extracted from the company’s
accounting records:

Summary Cash Account

(Rs.'000)
Balance at 1-1-X8 35 Payment to suppliers 2,047
Receipts from
customers 2,783 Payment for fixed assets 230
Issue of Shares 300 Payment for overheads 115
Sale of fixed assets 128 Wages and salaries 69
3,246 Taxation 243
Dividends 80
Repayments of bank
loan 250
. (3034)
Balance at 31-12-X8 212
3,246
Prepare Cash Flow Statement of this company Hills Ltd., for the year ended 31st December 19X8 in
accordance with AS-3 (Revised).
The Company does not have any cash equivalents.

Question:- 11 From the following information prepare a cash flow Statement of AA Ltd. For the
year ended 31-03-1999:

Balance Sheet

Liabilities Assets
97-98 98-99 97-98 98-99
Shares Capital Sundry Fixed
Equity Shares of
Rs. Assets:
10 each% 1,000 1,200 Gross Block 1,600 2,000
General Reserve 700 750 Less:Dep. 320 720
P&L A/c 200 220
Share Premium 20 40 Net Block 1,280 1,280
14% Debentures 400 450 Investment 600 700
Cash Credit 90 120 Inventories 500 700
Sundry
Sundry Creditors 180 220 Debtors 320 450
Provision for Cash and Bank 50 130
Taxation 10 20
Proposed Dividend 150 240
2,750 3,260 2,750 3,260
Other Information:

1. It discarded fixed assets costing Rs. 2 Lacs, accumulated depreciation Rs. 40,000 at 20,000 only.

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 2. It paid advance tax liability of Rs. 70 lacs for 1998-99 apart from payment of balance tax liability of
Rs.8 lacs for 1997-98.

3. It transferred excess tax provision for 1997-98 to general reserve.

Question:- 12 From the following Summary Cash Account of X Ltd. Prepare Cash Flow
Statement for the year ended 31st March, 2001 in a accordance with AS-3 (Revised) using the
direct method. The company does not have any cash equivalents.

Summary Cash Account for the year ended 31-03-2001

Rs.'000 Rs.'000
Balance at 1-4-2000 50 Payment to suppliers 2,000
Issue of Equity Payment for fixed
shares 300 assets 200
Receipts from
customers 2,800 Overhead expenses 200
Sale of fixed assets 100 Wages and Salaries 100
Taxation 250
Dividends 50
Repayments of bank
loan 300
Balance on 31-3-2001 150
3,250 3,250
(Nov - 2001)

Answer:- Cash Flow Operating Activities 250; Investing Activities (100); Financing Activities (50).

Question:- 13 Ms. Joythi of star Oils Limited has collected the following information for the
preparation of cash flow statement for the year 2000.

(Rs. In
Lakhs)
Net Profit 25,000
Dividend (Including dividend tax) paid 8,535
Provision for Income tax 5,000
Income Tax paid during the year 4,248
Loss on sale of assets (net) 40
Book Value of the assets sold 185
Depreciation charged to Profit & Loss Account 20,000
Profit on sale of Investments 100
Carrying amount of Investment sold 27,765
Interest income on investments 2,506
Interest expenses 10,000
Interest paid during the year 10,520
Increase in working capital 56,075
(excluding cash & bank balance).
Purchase of fixed assets 14,560
Investment in joint venture 3,850
Expenditure on construction work in progress 34,740
Proceeds from calls in arrear 2
Receipt of grant for capital projects 12
Proceeds from long-term borrowings 25,980
Proceeds from short-term borrowings 20,575

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 Amortization of capital grant 6
Opening cash and bank balance 5,003
Closing cash and bank balance 6,988
Required;
Prepare the Cash Flow Statement for the year 2000 in accordance with As-3, Cash Flow Statements
issued by the Institute of Chartered Accountants of India. (Make necessary assumptions). (May –
2001) Answer:- Operating Activities (2,895);
Investing Activities (22,634); Financing Activities 27,514.

Question:- 14 From the following summarized balance sheets and other information prepare
Cash flow statement.

Balance Sheets

Liabilities 31.3.98 31.3.99 Assets 31.3.98 31.3.99

Equity Share
Capital 5,00,000 6,00,000 Goodwill 20,000 15,000
General Reserve 50,000 55,000 Land 20,000 40,000
P&L A/c 40,000 80,000 Building
Share Premium - 10,000 Less: Depr. 1,20,000 1,24,000
Capital Reserve - 15,000 Machinery 5,00,000 4,49,600
10% Debentures 3,00,000 2,50,000 Less:Dep. 1,00,000 70,000
Investments
Sundry Creditors 91,000 12,000 Inventories 2,00,000 2,00,000
Provision for Debtors 42,000 60,000
Taxation 50,000 50,000 Cash & Bank 50,000 80,000
Proposed Dividend 75,000 90,000 Loans & Adv. 42,000 66,400
Preliminary
Exp. 12,000 7,000
11,06,000 11,62,000 11,06,000 11,62,000
Other Information:

1. Machinery costing Rs. 50,000 was sold during 1998-99 Accumulated depreciation Rs. 12,000 sales
proceeds Rs.24,000.

2. Depreciation charged on building @ 5% p.a. On Machinery @ 20% p.a.

3. No depreciation was charged on machine sold during the current year. Full depreciation was charged
on additions. Additions to Building were made only at the year end.

4. Investments costing Rs. 30,000 were sold for Rs. 40,000.

5. 10% Debentures were redeemed @ 10% premium.

6. Capital reserve was created out of revaluation profit of land premium on Redemptions of debenture
was adjusted against Capital Reserve.

7. No depreciation was charged on building extension.

8. Tax paid Rs. 40,000 and dividend paid rs. 75,000 for 1997-98.

Ans:- Operating Activities 1,21,000; Ivesting Activities (46,000);Financing Activities (45,000)

Question:- 15 From the following information prepare Cash flow statement:

Balance Sheets

31.3.00 31.3.01 31.3.00 31.3.01

Share Capital 10,00,000 11,00,000 Goodwill 50,000 40,000
Debentures 5,00,000 3,00,000 Land 4,20,000 6,60,000
General Reserve 2,00,000 2,00,000 Machinery 6,00,000 8,00,000

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 Profit and Loss A/c 1,10,000 1,90,000 Stock 2,50,000 2,10,000
Provision for Debtors(Good) 3,00,000 2,40,000
Preliminary
Income Tax 40,000 1,10,000 Exp. 30,000 20,000
Creditors 50,000 40,000 Cash 3,00,000 24,000
Bills Payable 20,000 30,000
Provision for
Doubtful debts 30,000 24,000
19,50,000 19,94,000 19,50,000 19,94,000
Additional Information:

During the year, a part of machine costing Rs. 7,500 (accumulated depreciation thereon being Rs. 2,500)was
sold for Rs.3,000.
Income –tax of 1999-2000 paid in 2000-2001 was Rs. 40,000.
Depreciation on machinery provided for 2000-2001 was Rs. 50,000.

Question:- 16 From the following balance sheet X Ltd., you are required to prepare cash flow
statement.

Balance Sheets

1-1-01 31-12-01 1-1-01 31-12-01

Equity Shares of
Rs. 3,00,000 4,00,000 Fixed Assets: 4,00,000 5,50,000
Less:
General Reserve 85,000 1,10,000 Accumulated
Bank loan 1,00,000 75,000 Depreciation 80,000 1,35,000
Creditors 3,10,000 2,90,000 3,20,000 4,15,000
Bank overdraft - 5,000 Investments 80,000 1,10,000
Proposed Dividend 45,000 60,000 Stock 2,00,000 2,25,000
Debtors 2,10,000 1,80,000
Cash 30,000 10,000
8,40,000 9,40,000 8,40,000 9,40,000
A piece of machinery costing Rs. 50,000 was sold for Rs.30,000, accumulated depreciation thereon
being Rs.10,000.

Question:- 17 From the following balance sheet X Ltd. And additional information, prepare cash
flow statement.

Previous Current Previous Current

year year year year
Share Capital 2,50,000 3,50,000 Goodwill 60,000 50,000
Reserves 1,30,000 1,65,000 Fixed Assets 2,90,000 3,95,000
Proposed Dividend 20,000 35,000 Current Assets 1,90,000 2,85,000
Provision for tax 50,000 60,000
Current Liabilities 90,000 1,20,000
5,40,000 7,30,000 5,40,000 7,30,000
19,50,000 19,94,000 19,50,000 19,94,000
Additional Information:

1. Depreciation on fixed assets provided during the year Rs. 30,000; Net Profit during the
year Rs. 80,000; Income –tax paid Rs. 50,000; Final dividend paid Rs.20,000.

2. Fixed asset costing Rs.60,000 (accumulated depreciation Rs.35,000) sold for Rs.30,000.

3. Fixed assets costing Rs. 50,000 was purchased by issue of share capital.

Question:- 18 The balance sheets of Hari Ltd. For 2000 and 2001 are given below:

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 2000 2001 2000 2001
Share Capital 6,00,000 8,00,000 Fixed Assets: 16,00,000 19,00,000
Capital Reserve - 20,000 Less: Dep. 4,60,000 5,80,000
General Reserve 3,40,000 4,00,000 11,40,000 13,20,000
P&L A/c 1,20,000 1,50,000 Investments 2,00,000 1,60,000
Debentures 4,00,000 2,80,000 Current Assets 5,60,000 6,60,000
Preliminary
Current Liabilities 2,40,000 2,60,000 Exp. 40,000 20,000
Proposed Dividend 60,000 72,000
Provision for tax 1,80,000 1,70,000
Unpaid Dividend - 8,000
19,40,000 21,60,000 19,40,000 21,60,000
Additional Information:

During the year 2001, the Company:

1. Sold one machine for Rs. 50,000 the cost of which was Rs. 1,00,000 and the depreciation provided on
it was Rs. 40,000;

2. Provided Rs. 1,80,000 as depreciation;

3. Sold some investment at a profit of Rs. 20,000, which was credited to capital Reserve;

4. Redeemed 30% of the Debentures @ 105;

5. Decided to Value stock at cost, less 10% the stock according to books on 31-12-2000 was Rs.
1,08,000. The stock on 31-12-2001 was correctly valued at Rs. 1,50,000; and

6. Decided to write of fixed assets costing Rs. 28,000 on which depreciation amount to Rs. 20,000 has
been provided.

Prepare the cash flow statement for the year 2001.

Question:- 19 The Summarized Balance Sheets of X Ltd. As on 31st March,2000 and 31st
March,2001 were as follows:

Particulars 99-2000 2000-01

Sources of Funds: 6,00,000 8,00,000
Share capital 3,40,000 4,20,000
General reserve 20,000 50,000
Profit and loss A/c 4,00,000 -
15% Debentures - A Series - 5,00,000
17,70,00
14% Debentures - B Series 13,60,000 0
Applications of Funds:
19,00,00
Fixed Assets at cost 16,00,000 0
Less: Depreciation to date 7,60,000 8,80,000
10,20,00
Net Fixed Assets 8,40,000 0
Investment - 3,00,000
Sundry Debtors 2,00,000 2,00,000
Less: Provisions for doubtful debts 20,000 50,000
1,80,000 1,50,000
Stock 2,20,000 1,60,000
Cash and Bank Balance 1,80,000 2,20,000
Other Current Assets 72,000 96,000
Current Assets 6,52,000 6,26,000
Less: Current Liabilities 1,32,000 1,76,000
Net Current Assets 5,20,000 4,50,000

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 17,70,00
Total (A) + (B) + ( C ) 13,60,000 0

While going though the accounts, the following are noticed:

1. Fixed assets to original cost of Rs. 75,000 with book value of Rs. 10,000 were scrapped and sold for
Rs. 5,000.

2. Included in current liabilities are proposed dividend figures:

31-03-2000 Rs. 60,000

31-03-2001 Rs. 80,000
3. During the year, interim dividend for Rs. 45,000 was paid besides, the outstanding
dividend as on 31-03-2000.

From the above you are required to prepare a statement of cash flow during 2000-2001.

Question:- 20 From the following details relating to the accounts of Husmundi & Co. Ltd.
Prepare Cash flow statement.

31-12-86 31-12-85 31-12-85

Liabilities Rs. Rs. Assets 31-12-86 Rs. Rs.
Share Capital 4,00,000 3,00,000 Goodwill 90,000 1,00,000
Plant &
Reserve 1,00,000 80,000 Machinery 4,29,250 2,98,000
Profit & Loss Debenture
Account 50,000 30,000 Discount 5,000 8,000
Prepaid
Debentures 1,00,000 1,50,000 Expenses 5,750 4,000
I.T .Provision 40,000 50,000 Investment 60,000 1,00,000
Sundry
Trade Creditors 70,000 90,000 Debtors 1,10,000 1,60,000
Proposed Dividend 40,000 30,000 Stock 80,000 50,000
Cash and Bank 20,000 10,000
8,00,000 7,30,000 8,00,000 7,30,000
1. 15% depreciation has been charged in the accounts on plant & Machinery.

2. Old machine costing Rs. 50,000 (WDV 20,000) have been sold for Rs. 35,000.

3. A machine Costing Rs. 10,000 (WDV Rs. 3,000) has been discarded.

4. Rs.10,000 profit has been earned by sale of investments.

5. Debentures have been redeemed at 5% premium.

6. Rs.45,000 income tax has been paid and adjusted against Income Tax Provision Account.

Question:- 21 From the following comparative balance sheet of M/s. A Ltd. Make out: Cash flow
statement.

Liabilities 2001 Rs. 2002 Rs. Assets 2001 Rs. 2002 Rs.
Equity Share Capital 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Preference Share Land &
capital 1,50,000 1,00,000 Building 2,00,000 1,70,000
General Reserve 40,000 70,000 Plant 80,000 2,00,000
Profit and Loss A/c 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed Dividends 42,000 50,000 Stock 77,000 1,09,000
Bills
Trade Creditors 55,000 83,000 Receivable 20,000 30,000
Bills Payable 20,000 16,000 Cash and Bank 15,000 10,000
Provision for
taxation 40,000 50,000 Bank 10,000 8,000

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 6,77,000 7,30,000 6,77,000 8,17,000
Supplementary Data:

1. Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on Plant and Land and
building respectively in 2002.

2. An interim dividend of Rs. 20,000 has been paid in 2002.

3. Income Tax Rs. 35,000 has been paid during the year 2002.

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