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 Rajesh had withdrawn Rs.  21,000 for personal use.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