question_answer
From the following balance sheet of Vikas Ltd. As on 31st March, 2016 and 2017, prepare a cash flow statement. Balance Sheet as at 31st March, 2016 and 2017 | Particulars | Note No. | 31st March, 2016 Amt (Rs.) | 31st March, 2017 Amt (Rs.) |
I. | EQUITY AND LIABILITIES | | | |
| 1. Shareholders? Funds | | | |
| (a) Share Capital | | 90,000 | 1,30,000 |
| (b) Reserves and Surplus | 1 | 48,000 | 84,000 |
| 2. Current Liabilities | | | |
| Trade Payables | | 17,400 | 22,000 |
| Total | | 1,55,400 | 2,36,000 |
II. | ASSETS | | | |
| 1. Non-current Assets | | | |
| Fixed Assets | | | |
| 2. Current Assets | | | |
| (a) Inventories | | 22,000 | 26,000 |
| (b) Trade Receivables | | 36,000 | 39,000 |
| (c) Cash and Cash Equivalents | | 4,000 | 5,000 |
| Total | | 1,55,400 | 2,36,000 |
Notes to Accounts Particulars | 2016 Amt (Rs.) | 2017 Amt (Rs.) |
1. Reserves and Surplus | | |
General Reserve | 30,000 | 55,000 |
Balance of statement of Profit and Loss | 20,000 | 30,000 |
Preliminary Expenses | (2,000) | (1,000) |
| 48,000 | 84,000 |
Additional Information (i) Depreciation Charged on fixed assets for the year 2016-2017 was Rs. 20,000. (ii) Income tax Rs. 5,000 has been paid during the year.
Answer:
Cash Flow Statement for the year ended 31st March, 2017 | Particulars | | 31st March, 2017 Amt (Rs.) |
I. | Cash Flow from Operating Activities | | |
| Net Profit before Tax and Extraordinary Item | | 40,000 |
| Adjustments for | | |
| (+) Depreciation | 20,000 | |
| Preliminary Expenses Written-off | 1,000 | 21,000 |
| Operating Profit before Working Capital Changes | | 61,000 |
| (+) Increase in Current Liabilities and Decrease in Current Assets | | |
| Trade Creditors | 4,600 | |
| (-) Increase in Current Assets and Decrease in Current Liabilities | | |
| Stock | (4,000) | |
| Debtors | (3,000) | (2,400) |
| Cash Flow from Operating Activities before Tax | | 58,600 |
II. | Cash Flow from Investing Activities | | |
| Purchase of Fixed Assets | (92,600) | |
| Net Cash Used in Investing Activities | | (92,600) |
III. | Cash Flow from Financing Activities | | |
| Issue of Share Capital | 40,000 | |
| Cash Flow from Financing Activities | | 40,000 |
| Net Increase in Cash and Cash Equivalent (I + II + III) | | 1,000 |
| (+) Cash and Cash Equivalent at the Beginning of the period | | 4,000 |
| Cash and Cash Equivalent at the End of the Period | | 5,000 |
Working Notes Dr Fixed Assets Account Cr Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
To Balance b/d | 93,400 | By Depreciation A/c | 20,000 |
To Bank A/c (Purchase) | 92,600 | By Balance c/d | 1,66,000 |
(Balancing figure) | | | |
| 1,86,000 | | 1,86,000 |
Calculation of Net Profit before Tax and Extraordinary Items | Amt (Rs.) |
Profit as per Balance Sheet (30,000 ? 20,000) | 10,000 |
(+) Income Tax Paid | 5,000 |
(+) Transfer to General Reserve | 25,000 |
| 40,000 |