question_answer
Prepare a cash flow statement from the following information of Mr.. Rajesh (a proprietor): Balance Sheet Particulars | 31st March, 2017 (Rs.) | 31st March, 2018 (Rs.) | Particulars | 31st March, 2017 (Rs.) | 31st March, 2018 (Rs.) |
Capital | 1,50,000 | 1,60,000 | Cash | 4,000 | 5,000 |
Bank Loan | 20,000 | 10,000 | Debtors | 35,000 | 40,000 |
Mr. Rajesh's Loan | 5,000 | 20,000 | Stock | 20,000 | 25,000 |
Creditors | 30,000 | 42,000 | Land | 25,000 | 36,000 |
Depreciation Provision | 10,000 | 15,000 | Building | 50,000 | 55,000 |
| | | Machinery | 81,000 | 86,000 |
| 2,15,000 | 2,47,000 | | 2,15,000 | 2,47,000 |
(i) During the year 2017 - 18, Mr. Rajesh had withdrawn Rs. 21,000 for personal use. (ii) A part of the machinery costing Rs. 10,000 (accumulated depreciation Rs. 8,000) was sold for Rs. 5,000.
Answer:
Cash Flow Statement for the year ending 31st March, 2018 | Particulars | | Amt (Rs.) |
A. | Cash Flow from Operating Activities | | |
| Net profit before Tax and Extraordinary items | | 31,000 |
| Adjustments for | | |
| (+) Depreciation on Machinery | 13,000 | |
| (-) Profit on Sale of Machinery | (3,000) | 10,000 |
| Operating Profit before Working Capital Changes | | 41,000 |
| (+) Increase in Current Liabilities and Decrease in Current Assets | 12,000 | |
| Creditors | | |
| (-) Decrease in Current Liabilities and Increase in Current Assets | | |
| Debtors | (5,000) | |
| Stock | (5,000) | 2,000 |
| Net Cash Flow from Operating Activities | | 43,000 |
B. | Cash flow from Investing Activities | | |
| Purchase of Land | (11,000) | |
| Purchase of Building | (5,000) | |
| Purchase of Machinery | (15,000) | |
| Sale of Machinery | 5,000 | |
| Net Cash Used in Investing Activities | | 26,000 |
C. | Cash Flow from Financing Activities | | |
| Loan from Mr. Rajesh | 15,000 | |
| Bank Loan Paid | (10,000) | |
| Net Cash Used in Financing Activities | (21,000) | |
| Net Increase in Cash and Cash Equivalents | | (16,000) |
| (+) Opening Cash and Cash Equivalents | | 1,000 |
| Closing Cash and Cash Equivalents | | 4,000 |
| | | 5,000 |
Walking Notes 1. | Amt (Rs.) |
Closing Capital | 1,60,000 |
(+) Drawings | 21,000 |
| 1,81,000 |
(-) Opening Capital | (1,50,000) |
Net Profit | 31,000 |
2. Dr Machinery Account Cr Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
To Balance b/d | 81,000 | By Bank A/c (Sale) | 5,000 |
To Profit and Loss A/c | 3,000 | By Provision for Depreciation A/c | 8,000 |
(Profit on sale) | | By Balance c/d | 86,000 |
To Bank A/c (purchase) | 15,000 | | |
(Balance figure) | | | |
| 99,000 | | 99,000 |
Dr Provision for Depreciation Account Cr Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
To Machinery A/c | 8,000 | By Balance b/d | 10,000 |
To Balance c/d | 15,000 | By Profit and Loss A/c (Dep) | 13,000 |
| | (Balance figure) | |
| 23,000 | | 23,000 |