question_answer
Following are the balance sheets of Arihant Tiles Ltd as at 31st March, 2017 and 31st March, 2018; Balance Sheet as at 31st March, 2018 and 2017 | | Particulars | Note No. | 2017 ? 18 (Rs.) | 2016 ? 17 (Rs.) |
| I. | EQUITY AND LIABILITIES | | | |
| | 1. Shareholder's Funds | | | |
| | (a) Share Capital | | 9,00,000 | 8,25,000 |
| | (b) Reserve and Surplus | 1 | 2,25,000 | 1,50,000 |
| | 2. Non-Current Liabilities | | | |
| | Long-term Borrowing | | | |
| | 3. Current Liabilities | | | |
| | (a) Trade Payables | | 1,34,250 | 1,53,000 |
| | (b) Short-term Provision | | 37,500 | 57,750 |
| | Total | | 14,76,750 | 13,13,250 |
| II. | ASSETS | | | |
| | 1. Non-current Assets | | | |
| | Fixed Assets | | | |
| | (a) Tangible Assets | 2 | 8,02,500 | 6,37,500 |
| | (b) Intangible Assets | 3 | 30,000 | 84,000 |
| | 2. Current Assets | | | |
| | (a) Current Investments | | 1,80,000 | 1,12,500 |
| | (b) Inventories | | 96,750 | 90,750 |
| | (c) Trade Receivables | | 1,27,500 | 1,07,250 |
| | (d) Cash and Cash Equivalents | | 2,40,000 | 2,81,250 |
| | Total | | 14,76,750 | 13,13,250 |
Notes to Accounts | | Particulars | 2017 ? 18 (Rs.) | 2016 ? 17 (Rs.) |
| 1. | Reserve and Surplus | | |
| | Surplus i.e. Balance in Statement of Profit and Loss | 2,25,000 | 1,50,000 |
| 2. | Tangible Assets | | |
| | Machinery | 9,52,500 | 7,50,000 |
| | (-) Accumulated Depreciation | (1,50,000) | (1,12,500) |
| | | 8,02,500 | 6,37,500 |
| 3. | Intangible Assets | | |
| | Goodwill | 30,000 | 84,000 |
Additional Information During the year a piece of machinery costing Rs. 18,000 on which accumulated depreciation was Rs. 12,000, was sold for Rs. 4,500. Prepare cash flow statement.
Answer:
Cash Flow Statement for the year ending 31st March, 2018 | | Particulars | | Amt (Rs.) |
| I. | Cash Flow from Operating Activities | | |
| | Net Profit before tax and extraordinary items | 75,000 | |
| | (+) Non-cash and Non-operating Expenses | | |
| | Goodwill Written-off | 54,000 | |
| | Depreciation on Machinery | 49,500 | |
| | Loss on Sale of Machinery | 1,500 | |
| | Operating Profit before Working Capital Changes | | 1,80,000 |
| | (-) Increase in Current Assets and Decrease in Current Liabilities | | |
| | Trade Receivables | (20,250) | |
| | Inventories | (6,000) | |
| | Trade Payables | (18,750) | |
| | Short-term Provisions | (20,250) | (65,250) |
| | Cash Flow from Operating Activities | | 1,14,750 |
| II. | Cash Flow from Investing Activities | | |
| | Purchase of Machinery | (2,20,500) | |
| | Sale of Machinery | 4,500 | |
| | Cash Used in Investing Activities | | (2,16,000) |
| III. | Cash Flow from Financing Activities | | |
| | Issue of Share capital | 75,000 | |
| | Money raised from Borrowings | 52,500 | |
| | Cash Flow from Financing Activities | | 1,27,500 |
| IV. | Net increase in Cash and Cash Equivalents (I + II + III) | | 26,250 |
| V. | Opening Balance of Cash and Cash Equivalents | | |
| | Current Investments | 1,12,500 | |
| | Cash and Cash Equivalents | 2,81,250 | 3,93,750 |
| VI. | Closing Balance of Cash and Cash Equivalents | | 4,20,000 |
| | Current Investments | 1,80,000 | |
| | Cash and Cash Equivalents | 2,40,000 | 4,20,000 |
Working Notes Dr Machinery Account Cr | Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
| To Balance b/d | 7,50,000 | By Bank A/c-Sale | 4,500 |
| To Bank A/c-Purchase (Balancing Figure) | 2,20,500 | By Accumulated Depreciation A/c | 12,000 |
| | | By loss on Sale of Machinery A/c | 1,500 |
| | | By Balance c/d | 9,52,500 |
| | 9,70,500 | | 9,70,500 |
Dr Accumulated Depreciation Account Cr | Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
| To Machinery A/c | 12,000 | By Balance b/d | 1,12,500 |
| To Balance c/d | 1,50,000 | By Depreciation A/c (Balancing figure) | 49,500 |
| | 1,62,000 | | 1,62,000 |
