KS ACADEMY CASH FLOW MATERIAL - 3

CASH FLOW STATEMENT – (MATERIAL 3)

CASH FLOW FROM OPERATING ACTIVITIES

1. From the following particulars, calculate Cash Flow from Operating Activities:
Case (a)
Rs.
Balance of Profit & Loss A/c as at 31.03.2014 4,00,000
Balance of Profit & Loss A/c as at 31.03.2015 5,00,000
Provision for Tax for the previous year 1,00,000
Provision for Tax for the current year 1,25,000
Depreciation 2,00,000
Decrease in Goodwill 50,000
Decrease in underwriting commission 40,000
Profit on Sale of Machinery 1,00,000
Increase in Debtors, Bills receivable & Prepaid Expenses 50,000
Increase in Creditors, Bills payable & outstanding Expenses 25,000
Case(b)
Rs.
Balance of Profit & Loss A/c as at 31.3.2014 5,00,000
Balance of Profit & Loss A/c as at 31.3.2015 4,00,000
Dividend Declared during the current year 3,00,000
Dividend Declared during the previous year 1,00,000
Depreciation 2,00,000
Increase in goodwill 50,000
Increase in Underwriting Commission 40,000
Loss on Sale of Machinery 1,00,000
Decrease in Debtors, Bills receivable & Prepaid Expenses 50,000
Decrease in Creditors, Bills payable & Outstanding Expenses 25,000
Case (c)
Rs.
Balance of Profit & Loss A/cas at 31.3.2014(Dr.) 4,00,000
Balance of Profit & Loss A/c as at 31.3.2015 5,00,000
Transfer To Reserves 3,00,000
Depreciation 2,00,000
Interest on Debentures 50,000
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Profit on Sale of Machinery 1,00,000

Increase in Accrued income 50,000
Increase in commission received in advance 25,000
Increase in bank balance 1,00,000

Case (d)
Rs.

Balance of Profit & Loss A/c as at 31.3.2014 4,00,000

Balance of Profit & Loss A/c as at 31.3.2015 (Dr.) 5,00,000
Increase in provision for Depreciation 2,00,000
Interest on investments 50,000
Profit on Sale of Machinery 1,00,000
Increase in accounts receivables 50,000
Increase in Provision for doubtful debts 25,000
Increase in bank overdraft 1,00,000

Case (e)

Rs.
Balance of Profit & Loss A/c as at 31.3.2014 (Dr.) 4,00,000
Balance of Profit & Loss A/c as at 31.3.2015 (Dr.) 5,00,000
Interest on debentures 50,000
Interest on investments 40,000
Depreciation 2,00,000
Profit on sale of machinery 1,00,000
Increase in Debtors, Bills receivable & Prepaid Expenses 50,000
Increase in Creditors, Bills payables & Outstanding expenses 25,000
Increase in marketable securities 1,00,000

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2. From the following particulars, Calculate Cash Flow from Operating Activities by indirect
method.

Profit and Loss A/c of Tulsian Ltd. for the year ended 31st March 2015
Dr. Cr.
Particulars Rs Particulars Rs
By Operating Profit
To Depreciation 1,40,000 9,18,000
before Depreciation
To Discount on issue of By profit on sale on
1,000 20,000
Debentures written off investments
To interest on long - term
28,000 By Dividend on Shares 10,000
Borrowings
By interest on
To Loss on Sale of Machine 30,000 6,000
investments
By rent from a plot of
To Patents written off 30,000 30,000
land
By insurance proceeds
To Provision for Tax 1,50,000
from
earthquake disaster
To Transfer to Reserve 1,00,000 1,00,000
settlement
To Interim Dividend 90,000 By refund of Tax 3,000
To Final Dividend 72,000

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To premium payable on
redemption of Redeemable 10,000
Preference Shares
To Net Profit 4,36,000
10,87,000 10,87,000

Additional Information:
31.3.2014 31.3.2015
Particulars Rs Rs
Stock 1,00,000 1,50,000
Trade debtors & Bills receivable 10,000 6,00,000
Trade Creditors & Bills payable 25,000 1,80,000
Provision for tax 1,18,000 1,50,000
Prepaid expenses 16,000 10,000
Outstanding Expenses 14,000 10,000
Accrued trading commission receivable 10,000 30,000
Marketable Securities 10,000 25,000
Cash Balance 10,000 16,000

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3. From the following information, Calculate the Cash Flows from Operating Activities:

Particulars As on 31.12.2014 As on 31.12.2015

Rs. Rs.
Goodwill 50,000 40,000
Fixed Assets (Net) 40,000 35,000
Debtors 70,000 85,000
Bill receivables 9,000 14,500
prepaid expenses 1,000 500
Stock 38,500 54,500
Cash and Bank 12,500 9,000
Preliminary expenses 7,500 5,000
General Reserve 20,000 25,000
Profit and Loss A/c 15,000 24,000
Dividend Payable 21,000 25,000
Trade creditors 12,500 23,500
Bills Payable 10,000 8,000
Outstanding expenses 15,000 18,000
Provision for taxation 20,000 25,000
Accrued income 3,000 3,500
Income received-in-advance 3,000 3,500

Note: There was no sale / purchase of fixed assets during 2014. Dividend declared during
the year Rs. 25,000

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