SAMPLE PAPER 1 CASH FLOW STATEMENT

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Time: 3 hours Maxi Mark 80

General Instructions:-

1. All questions are compulsory.

2. Marks are indicated against the questions. 3. Work should be neat and clean.

4. Overwriting be penalized.

Q1. Why cash flow statements are called historical in nature. 1

Q2 .State effect of payment of dividend on flow of cash. 1

Q3. Give one example of operation activity for a financial enterprise. 1 Q4. Sale of marketable securities at par would result in inflow, outflow of cash. Give your

answer with reason. 1

Q5 .When is interest received considered as an investing activity? 1 Q6. Redemption of debentures would result in inflow, outflow or no flow of cash? Give your

answer with reason. 1

Q7. Profit made during the year 2008-09 by Bata Ltd. Was Rs. 2, 50,000 (after charging deprecation on fixed assets Rs. (20,000).state cash flow from operating activities. 1 Q8.In a non- financial enterprise cash receipts from customers is Rs.2, 00,000 and cash paid to suppliers and employees is Rs. 15,000. State the amount of cash flows from operating activity1

Q9. Give the meaning of cash flow statement? 3

Q10. Explain the limitation of cash flow statement? 3

Q11. What are two major inflows and two major outflows of cash from investing activities?3 Q12. Classify the following into cash flows from investing activities/ financing activities while

preparing a cash flow statement: 3

(a) Redemption of preference shares (b) Sale of fixed assets

(c) Receipt of dividend

Q13.Calculate the cash flow from the given information: 4

(i) Investments at the beginning of the period Rs. 40,000 (ii) Investments at the end of the period Rs. 30,000

(iii) During the year company had sold 30% of its investments held in the beginning of the period at a profit of Rs. 6,000.

Q14. Classify the following into operating, investing and financing activities. 4 (a) Issue of Share Rs. 2,00,000

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5,000 (c) Sale of Goods Rs. 5,00,000 (d) Receipt of interest on investment by a bank.

Q15.classiy following into cash flows from investing activities/financing activities while preparing a

cash flow statements: 4

a. Redemption of debentures b. Sale of fixed assets c.Receipt of dividend d.Interest received

Q16. Classify the following into cash flows from investing activities/financing activities while

preparing cash flow statement: 4

a. Fixed assets purchased b.Dividend Paid

c.Interest paid

d.Redemption of preference shares

Q.17. From the3 following information calculate cash from operating activities: 4 Opening cash balance Rs. 10000

Closing cash balance Rs. 12000 Decreasing debtors Rs. 5000 Increase in creditors Rs. 7000 Net profit of the year Rs. 20000

Q18. X Ltd. made a profit of Rs. 1,00,000 after charging Depreciation of Rs. 20,000 on assets and a transfer to General Reserve of Rs. 30,000 The goodwill written off was Rs. 7,000 and the gain on sale of Machinery was Rs. 3,000. The other information available to you (changes in the value of Current Assets & Current Liabilities) is as follows: 6 At the end of the year Debtors showed an increase of Rs. 6,000, Creditors an increase of Ps 10,000, Prepaid Expenses an Increase of Rs. 200; Bills Receivable a Decrease of Rs. 3000; Bills Payable a Decrease of Rs. 4,000 and Outstanding Expenses a Decrease of Rs. 2,000. Ascertain the cash flow from the operating activitIes.

Q19. The following balances appeared in Plant Account and Accumulated Depre- ciation

Account In the books of Bharat Ltd: 6

Balances as a 31.3.2003

Rs.

31.3.2004 Rs.

Plant 7,50,000 9,70,000

Ancumulated Depreciation 1,80,000 2,40,000

Addition Information:

Plant costing Rs. 1,45000; accumulated depreciation thereon Rs. 70,000, was sold for Rs. 35,000.

You are required to:

a) Compute the amount of Plant purchased, depreciation charged for the year and loss on sale of plant.

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Q20. . From the following statement calculate the cash generated from operating activities: 6

Liabilities Rs. Assets Rs.

To Salaries To Rent

To Depreciation To Loss on Sale of Building

To Goodwill written off To Proposed Dividend To Provision for Tax To Net Profit

15,000 7,000 25,000 6,000 10,000 10,000 5,000 25,000 1, 03,000

By Gross Profit By Profit on Sale of Machinery By Dividend Received 85,000 12,000 6,000 ______ 1,03,000 Q21. From the following balance sheet of Mohan Ltd. Prepare cash flow statement: 6

Liabilities 2006 2007 Assets 2006 2007

Equity share capital Profit & Loss Bank loan Acc. Depreciation Creditor Proposed dividend 2,00,000 1,60,000 1,00,000 80,000 1,40,000 60,000 3,00,000 2,00,000 80,000 1,00,000 1,20,000 70,000 Fixed assets Stock Debtors Bills Receivable bank 4,00,000 1,30,000 1,00,000 20,000 90,000 6,00,000 1,50,000 60,000 30,000 30,000

7,40,000 8,70,000 7,40,000 8,70,000

Q22. Calculate ‘cash Flows from operating activities’ from the following information: 8

Particulars 2003 Rs. 2004 Rs.

Debtors

Prepaid Expenses Accrued Income

Income Received in Advance Creditors Bills payable Outstanding Expenses 42,000 2,000 1,500 800 26,000 13,000 8,000 46,000 2,700 1,200 1,000 28,000 11,000 6,000 Profit made during 2004 amounted to Rs. 1,00,000 after taking into account the following

adjustments:

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(i) Profit on Sale of Investment (ii) Loss on Sale of Machine (iii) Goodwill Amortized (iv) Depreciation Charged

2,000 900 3,000 2,900

Q23. Calculate net-cash flows from operating activities from the following in formation: 8

Rs.

Profits made during 1996 Transfer to General Reserve Depreciation provided Profit on sale of furniture Loss on sale of machine

Preliminary expenses written off

50,000 10,000 20,000 5,000 10,000 10,000 Additional Information:

1995 Rs. 1996 Rs.

Debtors

Bills Receivable Stock

Prepaid Expenses Creditors

Bills Payable

Outstanding Expenses

10,000 7,000 15,000 2,000 20,000 15,000 3,000

15,000 5,000 18,000 3,000 18,000 25,000 4,000

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Q1. Give the two examples of cash equivalents. 1

Q2.What is cash flow statement? 1

Q3.what is meant by “extraordinary items”? 1

Q4. Mutual Fund Company receives a dividend of Rs.25lakhs on its investments in other company’s shares. Why is it a cash inflow from operating activities for this company? 1 Q5. How will you treat bank overdraft in cash flow statement? 1

Q6. Interest received by a finance company is classified under which kind of activity while

preparing a cash flow statement? 1

Q7. ABC Ltd. made profit of Rs.2, 60,000 before considering depreciation on machinery Rs. 10,000 and loss on sale of furniture Rs. 25,000. State the amount to be shown as cash flows from

operating activities. 1

Q8. DPR Ltd made profit of Rs. 2, 50,000 after considering depreciation on fixed assets Rs. 30,000 and profit on sale of building Rs. 20,000 .State the amount to be shown as cash flow from

operating activities. 1

Q9. What is meant by the term cash and cash equivalents? 3

Q10.How are the various activities classified according to AS-3(Revised) while preparing the

cash flow statement? 3

Q11.PRD Ltd engaged in the business of retailing of two wheelers invested RS. 50,00,000 in the shares of a manufacturing company. State with reason whether the dividend received on this investment will be cash flow from operating activities or investing activities. 3

Q12. (Investing activities) Slim Ltd. provided the following information; 3 a. Machinery was purchased for Rs. 60,000

b. A part of machinery, having book value Rs.2,000 was sold for Rs5,000

c. An equipment costing Rs.10,000 has been condemned and scrapped. calculate cash flows from investing activities .

Q13. Q.19 From the3 following information calculate cash from operating activities: 4 Opening cash balance Rs. 20000

Q14. Briefly explain the objectives of preparing the cash flow statement. 4 Q15. Give a list of items which result in reduction of cash. 4 Q16. Give the treatment of dividend in case of (a) Financial enterprises and (b) Other than

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Q17. PQR Ltd. Had the following balances 4 Investment at the end of 2002 Rs. 40000

Investment at the end of 2003 Rs. 33200

During the year the company had sold 25% of its investment at the profit of Rs. 9000. Calculate cash from operating activities and investing activities if the company has earned a profit Rs. 20000 during the year.

Q18. The following balances appeared in Machinery Account and Accumulated Depreciation

Account in the books of Jai Bharat Ltd: 6

Balances as at 31.3.2003 31.3.2004

Machinery Account

Accumulated Depreciation Account

Rs. 17,78,985 3,40,795

Rs. 26,55,450 4,75,690 Additional Information:

Machinery costing Rs. 2,65,000 on which accumulated depreciation was Rs. 1,00,000, was sold for Rs. 75,000.

a) Compute the amount of machinery purchased, depreciation charged for the year and loss on sale of machinery.

b) How shall each of the items related to machinery be shown in the Cash Flow Statement?

Q19. From the following statement calculate the cash generated from operating activities: 6 Statement of profit for the year ending March 31st, 2005

Particulars Rs. Particulars Rs.

To Salaries To Rent

To Goodwill Written off To Proposed Dividend To Provision for Tax To Net Profit

10,000 5,000 20,000 5,000 8,000 10,000 15,000 _24,000 97,000

By Gross Profit By Profit on Sale of Machinery

By Dividend Received By Commission Accrued

85,000 5,000 3,000 4,000

_____ 97,000

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Q20. From the following statement, calculate the cash generated from operating activities: Statement of profit for the year ending March 31st 2007 6

Particulars Amounts Particulars Amounts

Salaries Rent

Depreciation

Loss on sale of Building Goodwill written off Proposed dividend Provision for tax Net profit

10,000 5,000 20,000 5,000 8,000 10,000 15,000 24,000

Gross profit

Profit on sale of Machinery Dividend Received

Commission Accrued

85,000 5,000 3,000 4,000

Q21. X Ltd made a profit of Rs.1,00,000 after charging depreciation of Rs.20,000 on assets and a transfer to General Reserve of Rs.30,000 . The goodwill written off was Rs.7,000 6

And the gain on sale of Machinery was Rs.3, 000 .The other information available to you (change in the value of Current Assets and Current Liabilities) is as follows:

At the end of the year, Debtors showed an increase of Rs.6,000 : creditors an increases of Rs. 10,000; prepaid expenses an increase of Rs. 200; bills payable a decrease of Rs4,000 and outstanding expense a decrease or Rs.2,000.

Ascertain the cash flow from the operating activities.

Q22. On March 31st, 2003 Ramesh and Co. indicated a profit of Rs. 1,25,000, after considering

the following: 8

Rs.

Depreciation on buildings

Depreciation on plant and machinery Amortization of goodwill

Gain on sale of machinery

25,000 45,000 20,000 10,000

The current assets and current liabilities at the beginning and the end of the year are:

1-4-2002

Rs.

31-2-2003 Rs. Accounts Receivable

Stock on hand Cash in hand

35,000 75,000 18,000

45,000 69,000 30,000

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Accounts payable Expenses payable Bank overdraft

30,000 10,000 60,000

32,000 5,000 35,000 Ascertain the net cash (cash flow) from operating activities.

Q23. From following Balance Sheet of Harshit Ltd. And the additional information given, make

out a cash Flow Statement: 8

Equity share capital Pref. share capital General Reserve Profit and loss A/c Proposed dividend Creditors

Bills payable Prov.for taxation

3,00,000 1,50,000 40,000 30,000 42,000 55,000 20,000 40,000

4,00,000 1,00,000 70,000 48,000 50,000 83,000 16,000 50,000

Goodwill

Land and Building Plant

Debtors Stock

Bills Receivable Cash in hand Cash at Bank

1,15,000 2,00,000 80,000 1,60,000 77,000 20,000 15,000 10,000

90,000 1,70,000 2,00,000 2,00,000 1,09,000 30,000 10,000 8,000

6,77,000 8,17,000 6,77,000 8,17,000

Additional Information

Depreciation of Rs. 10,000 and Rs.20,000 have been charged on plant account and land and building account respectively in 2007-08

An interim dividend of Rs. 20,000 has been paid in 2007-08 Income tax Rs. 35,000 was paid during the year 2007-08.

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Q1.state whether purchase of furniture by issue of debentures will result in inflow, or no flow of

cash. 1

Q2.what is meant by extraordinary activities. 1 Q3. What is meant by investing activities? 1

Q4. What is meant by financing activities? 1 Q5.state why non cash transactions are ignored while preparing a cash flow statement? 1

Q6.Under which type of activity will you classify ‘cash received from debtor’ while preparing

cash flow statement? 1

Q7Cash paid as salaries to workers’ would result in inflow, outflow or no flow of cash? Give

your answer with reason. 1

Q8. State with reason whether the issue of 9% debentures to the vendors for the purchase of machinery of Rs. 50,000 will result in inflow, outflow or no flow of cash? 1 Q9.what is the preparing objective of cash flow statement. 3 Q10.Classify the following into cash flows from investing activities \financing activities while

preparing a cash flow statement; 3

a. Fixed assets purchased b. Dividend paid

c. Cash received from issue of equity shares d. Net cash received from sale of investment.

Q11.Classify the following into cash flows from investing activities/financing activities while

preparing a cash flow statement; 3

(a) Redemption of preference shares (b) Sales of fixed assets

(c) Receipt of dividend (d) Interest Received

Q12 .State two objective of preparing a cash flow statement? 3 Q.13. From the following information calculate cash from investing activities and financing

activities: 4

Opening cash balance Rs. 20000 Closing cash balance Rs. 25000 Decreasing debtors Rs. 8000 Increase in creditors Rs. 10000 Sale of fixed assets Rs. 50000 Redemption of debentures Rs. 22000

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Net profit of the year Rs. 27000

Q14. Explain the main features of cash flow statement. 4

Q15. Fine garments pvt. ltd. provided the following information; 4 a. Machinery was purchased for Rs. 120,000

Q16. Classify with reasons the following into cash flows from investing activities/ financing

activities while preparing a cash flow statement: 4

(a) Long term borrowings (b) Sale of fixed assets

(c) Profit on sale of fixed assets (d) Loss on sale of fixed assets

Q17. Explin briefly managerial uses of statement of changes in financial position on cash basis. 4

Q18. From the following summarised Balance Sheets of a company calculate cash flow from

operating activities 6

Liabilities 2004 Rs. 2005 Rs. Assets 2004 Rs 2005 Rs.

Creditors Bills Payable Other Current Liabilities Share Capita; Profit & Loss A/c

30,000 30,000 50,000 1,00,000 _80,000 2,90,000

35,000 35,000 55,000 1,20,000 1,00,000 3,45,000

Cash

Investments Stock Debtors Fixed Assets

30,000 50,000 40,000 40,000 1,30,000 2,90,000

40,000 40,000 55,000 50,000 1,60,000 3,45,000

Q19. The following balances appeared in Plant Account and Accumulated Depreciation

Account in the Books of Bharat Ltd. 6

Balances as at 31 .3.2007 31.3.2008

Plant 7, 50,000 9, 70,000

Accumulated depreciation 1, 80,000 2, 40,000’ Additional Information

Plant costing Rs. 1,45,000 : accumulated depreciation thereon 70,000, was sold for Rs. 35,000.

You are required to

• Compute the amount plant purchased , depreciation charged for the year and loss on

sale of plant

• Show how each of the item related to the plant will be shown in the cash flow

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Q20. Prepare cash flow statement of Rose Ltd from the following information for the year

ended March 31, 2008 6

Particulars 31.3.2007 31.3.2008

Investment

Fixed Assets(at cost) Equity share capital Long term loan Cash

1,80,000 2,10,000 10,00,000 8,00,000 64,000

2,40,000 4,00,000 14,00,000 4,45,000 44,000 Additional Information

• Cash flow from the operating activities after tax and extraordinary items Rs. 3,80,000 • Depreciation on fixed assets Rs. 85,000

• Interest received Rs. 45,000

• Dividend paid during the year Rs. 1,60,000

Q21. The following is the position of current assets and current liabilities of vijay Ltd. 6

Particulars 31.3.2007 31.3.2008

Creditors Debtors

Bills receivables Prepaid insurance

20000 30000 18000 2000

15000 20000 29000 5000

The company incurred a loss of Rs. 6000 during the year. Calculate cash from operating activities.

Q22. Raj Ltd. had a profit of Rs. 17,50,000 for the year ended 31.3.2006 after considering the

following : 8

Depreciation on building

Rs. 1,30,000

Depreciation on plant and machinery Rs. 40,000

Goodwill written off Rs. 25,000

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Following was the position of current assets and current liabilities of the company as on 31.3. 2005 and 31.3.2006.

31.3.2005 Rs. 31.3.2006 Rs.

Stock 70,000 87,000

Bills Receivable 67,000 58,000

Cash 60,000 75,000

Creditors 68,000 77,000

Outstanding Salary 7,000 4,000

Bills Payable 43,000 29,000

Calculate cash flow from operating activities.

Q23. With the help of the following Profit and Loss Account for the year ended 31.3.2006 and Balance Sheets as on 31.3.2005 and 31.3.2006 of Janta Ltd., calculate cash flow from operating

activities : 8

Profit and Loss Account of Janta Ltd. for the year ended 31.3.2006

Debit Credit

Particulars Amount Rs. Particulars Amount Rs.

Gross Profit 5,00,000

Depreciation 0 Salary

Rent

Commission Other Expenses Net Profit

17,000 35,000 72,000 23,000 3,10,000

5,00,000 5,00,000

Proposed Dividend 1,50,000 Net Profit 3,10,000

Retained Profit 1,60,000

3,10,000 3,10,000

Balance Sheets of Janta Ltd. as on 31.3.2005 and 31.3.2006

Liabilities 2005 Rs. 2006 Rs. Assets 2005 Rs. 2006 Rs.

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Reserves 60,000 2,20,000

Loan 20,000 30,000

Patents — 50,000

Proposed Dividend 20,000 1,70,000 Stock 1,05,000 1,20,000

Creditors 1,80,000 10,000 Debtors 70,000 90,000

Bills Payable 1,70,000 20,000

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QUESTION BANK CASH FLOW STATEMENT ONE MARKS QUESTIONS

Q1.state whether purchase of furniture by issue of debentures will result in inflow, or no flow of cash.

Q2.what is meant by extraordinary activities. Q3. What is meant by investing activities?

Q4. What is meant by financing activities?

Q5.state why non cash transactions are ignored while preparing a cash flow statement? Q6.Under which type of activity will you classify ‘cash received from debtor’ while preparing cash flow statement?

Q7Cash paid as salaries to workers’ would result in inflow, outflow or no flow of cash? Give your answer with reason.

Q8. State with reason whether the issue of 9% debentures to the vendors for the purchase of machinery of Rs. 50,000 will result in inflow, outflow or no flow of cash?

Q9. Give the two examples of cash equivalents. Q10.What is cash flow statement?

Q11.what is meant by “extraordinary items”?

Q12. Mutual Fund Company receives a dividend of Rs.25lakhs on its investments in other company’s shares. Why is it a cash inflow from operating activities for this company? Q13. How will you treat bank overdraft in cash flow statement?

Q14. Interest received by a finance company is classified under which kind of activity while preparing a cash flow statement?

Q15. ABC Ltd. made profit of Rs.2, 60,000 before considering depreciation on machinery Rs. 10,000 and loss on sale of furniture Rs. 25,000. State the amount to be shown as cash flows from operating activities.

Q16. DPR Ltd made profit of Rs. 2, 50,000 after considering depreciation on fixed assets Rs. 30,000 and profit on sale of building Rs. 20,000 .State the amount to be shown as cash flow from operating activities.

Q17. Why cash flow statements are called historical in nature. Q18 .State effect of payment of dividend on flow of cash.

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Q19. Give one example of operation activity for a financial enterprise.

Q20. Sale of marketable securities at par would result in inflow, outflow of cash. Give your answer with reason.

Q21 .When is interest received considered as an investing activity?

Q22. Redemption of debentures would result in inflow, outflow or no flow of cash? Give your answer with reason.

Q23. Profit made during the year 2008-09 by Bata Ltd. Was Rs.

2, 50,000 (after charging deprecation on fixed assets Rs. (20,000).state cash flow from operating activities.

Q24.In a non- financial enterprise cash receipts from customers is Rs.2, 00,000 and cash paid to suppliers and employees is Rs. 15,000. State the amount of cash flows from operating activity.

THREE AND FOUR MARKS QUESTIONS

Q1. What is meant by the term cash and cash equivalents?

Q2.How are the various activities classified according to AS-3(Revised) while preparing the cash flow statement?

Q3.PRD Ltd engaged in the business of retailing of two wheelers invested RS. 50,00,000 in the shares of a manufacturing company. State with reason whether the dividend received on this investment will be cash flow from operating activities or investing activities.

Q4. (Investing activities) Slim Ltd. provided the following information; a. Machinery was purchased for Rs. 60,000

Q5. From the3 following information calculate cash from operating activities: Opening cash balance Rs. 20000

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Q6. Briefly explain the objectives of preparing the cash flow statement. Q7. Give a list of items which result in reduction of cash.

Q8. Give the treatment of dividend in case of (a) Financial enterprises and (b) Other than financial enterprises

Q9. PQR Ltd. Had the following balances

Investment at the end of 2002 Rs. 40000 Investment at the end of 2003 Rs. 33200

During the year the company had sold 25% of its investment at the profit of Rs. 9000. Calculate cash from operating activities and investing activities if the company has earned a profit Rs. 20000 during the year.

Q10.what is the preparing objective of cash flow statement.

Q11.Classify the following into cash flows from investing activities \financing activities while preparing a cash flow statement;

a. Fixed assets purchased b. Dividend paid

c. Cash received from issue of equity shares d. Net cash received from sale of investment.

Q12.Classify the following into cash flows from investing activities/financing activities while preparing a cash flow statement;

(e) Redemption of preference shares (f) Sales of fixed assets

(g) Receipt of dividend (h) Interest Received

Q13 .State two objective of preparing a cash flow statement?

Q.14. From the following information calculate cash from investing activities and financing activities:

Opening cash balance Rs. 20000 Closing cash balance Rs. 25000 Decreasing debtors Rs. 8000 Increase in creditors Rs. 10000 Sale of fixed assets Rs. 50000 Redemption of debentures Rs. 22000

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Dividend paid Rs. 68000 Net profit of the year Rs. 27000 Q15. Explain the main features of cash flow statement.

Q16. Fine garments pvt. ltd. provided the following information; a. Machinery was purchased for Rs. 120,000

Q17. Classify with reasons the following into cash flows from investing activities/ financing activities while preparing a cash flow statement:

(e) Long term borrowings (f) Sale of fixed assets

(g) Profit on sale of fixed assets (h) Loss on sale of fixed assets

Q18. Explin briefly managerial uses of statement of changes in financial position on cash basis. Q19. Give the meaning of cash flow statement?

Q20. Explain the limitation of cash flow statement?

Q21. What are two major inflows and two major outflows of cash from investing activities? Q22. Classify the following into cash flows from investing activities/ financing activities while preparing a cash flow statement:

(d) Redemption of preference shares (e) Sale of fixed assets

(f) Receipt of dividend

Q23.Calculate the cash flow from the given information: (i) Investments at the beginning of the period Rs. 40,000 (ii) Investments at the end of the period Rs. 30,000

(iii) During the year company had sold 30% of its investments held in the beginning of the period at a profit of Rs. 6,000.

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Q24. Classify the following into operating, investing and financing activities. (a) Issue of Share Rs. 2,00,000

(b) Receipt of interest on Investment by a manufacturing Co. Rs. 5,000 (c) Sale of Goods Rs. 5,00,000

(d) Receipt of interest on investment by a bank.

Q25.classiy following into cash flows from investing activities/financing activities while preparing a cash flow statements:

e. Redemption of debentures f. Sale of fixed assets g.Receipt of dividend h.Interest received

Q26. Classify the following into cash flows from investing activities/financing activities while preparing cash flow statement:

e. Fixed assets purchased f.Dividend Paid

g.Interest paid

h.Redemption of preference shares

Q.27. From the3 following information calculate cash from operating activities: Opening cash balance Rs. 10000

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SIX AND EIGHT MARKS QUESTIONS

Q1. From the following summarised Balance Sheets of a company calculate cash flow from operating activities

Liabilities 2004 Rs. 2005 Rs. Assets 2004 Rs 2005 Rs.

Creditors Bills Payable Other Current Liabilities Share Capita; Profit & Loss A/c

30,000 30,000 50,000 1,00,000 _80,000 2,90,000

35,000 35,000 55,000 1,20,000 1,00,000 3,45,000

Cash

Investments Stock Debtors Fixed Assets

30,000 50,000 40,000 40,000 1,30,000 2,90,000

40,000 40,000 55,000 50,000 1,60,000 3,45,000

Q2. The following balances appeared in Plant Account and Accumulated Depreciation Account in the Books of Bharat Ltd.

Balances as at 31 .3.2007 31.3.2008

Plant 7, 50,000 9, 70,000

Accumulated depreciation 1, 80,000 2, 40,000’

Plant costing Rs. 1,45,000 : accumulated depreciation thereon 70,000, was sold for Rs. 35,000.

You are required to

• Compute the amount plant purchased , depreciation charged for the year and loss on

sale of plant

• Show how each of the item related to the plant will be shown in the cash flow

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Q3. Prepare cash flow statement of Rose Ltd from the following information for the year ended March 31, 2008

Particulars 31.3.2007 31.3.2008

Investment

Fixed Assets(at cost) Equity share capital Long term loan Cash

1,80,000 2,10,000 10,00,000 8,00,000 64,000

2,40,000 4,00,000 14,00,000 4,45,000 44,000 Additional Information

• Cash flow from the operating activities after tax and extraordinary items Rs. 3,80,000 • Depreciation on fixed assets Rs. 85,000

• Interest received Rs. 45,000

• Dividend paid during the year Rs. 1,60,000

Q4. The following is the position of current assets and current liabilities of vijay Ltd.

Particulars 31.3.2007 31.3.2008

Creditors Debtors

Bills receivables Prepaid insurance

20000 30000 18000 2000

15000 20000 29000 5000

The company incurred a loss of Rs. 6000 during the year. Calculate cash from operating activities.

Q5. Raj Ltd. had a profit of Rs. 17,50,000 for the year ended 31.3.2006 after considering the following :

Depreciation on building Rs. 1,30,000

Depreciation on plant and machinery Rs. 40,000

Goodwill written off Rs. 25,000

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Following was the position of current assets and current liabilities of the company as on 31.3. 2005 and 31.3.2006.

31.3.2005 Rs. 31.3.2006 Rs.

Stock 70,000 87,000

Bills Receivable 67,000 58,000

Cash 60,000 75,000

Creditors 68,000 77,000

Outstanding Salary 7,000 4,000

Bills Payable 43,000 29,000

Calculate cash flow from operating activities.

Q6. With the help of the following Profit and Loss Account for the year ended 31.3.2006 and Balance Sheets as on 31.3.2005 and 31.3.2006 of Janta Ltd., calculate cash flow from operating activities :

Profit and Loss Account of Janta Ltd. for the year ended 31.3.2006

Debit Credit

Particulars Amount Rs. Particulars Amount Rs.

Gross Profit 5,00,000

Depreciation 0 Salary

Rent

Commission Other Expenses

17,000 35,000 72,000 23,000 3,10,000

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Net Profit

5,00,000 5,00,000

Proposed Dividend 1,50,000 Net Profit 3,10,000

Retained Profit 1,60,000

3,10,000 3,10,000

Balance Sheets of Janta Ltd. as on 31.3.2005 and 31.3.2006

Liabilities 2005 Rs. 2006 Rs. Assets 2005 Rs. 2006 Rs.

Share Capital 2,00,000 3,50,000

Reserves 60,000 2,20,000

Loan 20,000 30,000

Patents — 50,000

Proposed Dividend 20,000 1,70,000 Stock 1,05,000 1,20,000

Creditors 1,80,000 10,000 Debtors 70,000 90,000

Bills Payable 1,70,000 20,000

6,50,000 8,00,000 6,50,000 8,00,000

Q7. The following balances appeared in Machinery Account and Accumulated Depreciation Account in the books of Jai Bharat Ltd:

Balances as at 31.3.2003 31.3.2004

Machinery Account

Accumulated Depreciation Account

Rs. 17,78,985 3,40,795

Rs. 26,55,450 4,75,690

Additional Information:

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for Rs. 75,000. You are required to:

a) Compute the amount of machinery purchased, depreciation charged for the year and loss on sale of machinery.

b) How shall each of the items related to machinery be shown in the Cash Flow Statement? Q8. From the following statement calculate the cash generated from operating activities:

Statement of profit for the year ending March 31st, 2005

Particulars Rs. Particulars Rs.

To Salaries To Rent

To Goodwill Written off To Proposed Dividend To Provision for Tax To Net Profit

10,000 5,000 20,000 5,000 8,000 10,000 15,000 _24,000 97,000

By Dividend Received By Commission Accrued

85,000 5,000 3,000 4,000

_____ 97,000

Q9. From the following statement, calculate the cash generated from operating activities: Statement of profit for the year ending March 31st 2007

Particulars Amounts Particulars Amounts

Salaries Rent

Depreciation

Loss on sale of Building Goodwill written off Proposed dividend Provision for tax Net profit

10,000 5,000 20,000 5,000 8,000 10,000 15,000 24,000

Gross profit

Profit on sale of Machinery Dividend Received

Commission Accrued

85,000 5,000 3,000 4,000

(24)

Q10. X Ltd made a profit of Rs.1,00,000 after charging depreciation of Rs.20,000 on assets and a transfer to General Reserve of Rs.30,000 . The goodwill written off was Rs.7,000

And the gain on sale of Machinery was Rs.3, 000 .The other information available to you (change in the value of Current Assets and Current Liabilities) is as follows:

At the end of the year, Debtors showed an increase of Rs.6,000 : creditors an increases of Rs. 10,000; prepaid expenses an increase of Rs. 200; bills payable a decrease of Rs4,000 and outstanding expense a decrease or Rs.2,000.

Ascertain the cash flow from the operating activities.

Q11. On March 31st, 2003 Ramesh and Co. indicated a profit of Rs. 1,25,000, after considering the following:

Rs.

Depreciation on buildings

Depreciation on plant and machinery Amortization of goodwill

Gain on sale of machinery

25,000 45,000 20,000 10,000

The current assets and current liabilities at the beginning and the end of the year are:

1-4-2002

Rs.

31-2-2003 Rs. Accounts Receivable

Stock on hand Cash in hand Accounts payable Expenses payable Bank overdraft

35,000 75,000 18,000 30,000 10,000 60,000

45,000 69,000 30,000 32,000 5,000 35,000

(25)

Q12. From following Balance Sheet of Harshit Ltd. And the additional information given, make out a cash Flow Statement:

Equity share capital Pref. share capital General Reserve Profit and loss A/c Proposed dividend Creditors Bills payable Prov.for taxation 3,00,000 1,50,000 40,000 30,000 42,000 55,000 20,000 40,000 4,00,000 1,00,000 70,000 48,000 50,000 83,000 16,000 50,000 Goodwill

Land and Building Plant

Debtors Stock

Bills Receivable Cash in hand Cash at Bank

1,15,000 2,00,000 80,000 1,60,000 77,000 20,000 15,000 10,000 90,000 1,70,000 2,00,000 2,00,000 1,09,000 30,000 10,000 8,000

6,77,000 8,17,000 6,77,000 8,17,000

Depreciation of Rs. 10,000 and Rs.20,000 have been charged on plant account and land and building account respectively in 2007-08

An interim dividend of Rs. 20,000 has been paid in 2007-08 Income tax Rs. 35,000 was paid during the year 2007-08.

Q13. XYZ Ltd. made a profit of Rs. 2,00,000 after charging Depreciation of Rs. 40,000 on assets and a transfer to General Reserve of Rs. 60,000 The goodwill written off was Rs. 14,000 and the gain on sale of Machinery was Rs. 6,000. The other information available to you (changes in the value of Current Assets & Current Liabilities) is as follows:

At the end of the year Debtors showed an increase of Rs. 12,000, Creditors an increase of Ps 20,000, Prepaid Expenses an Increase of Rs. 400; Bills Receivable a Decrease of Rs. 5000; Bills Payable a Decrease of Rs. 8,000 and Outstanding Expenses a Decrease of Rs. 4,000. Ascertain the cash flow from the operating activitIes.

Q14. The following balances appeared in Plant Account and Accumulated Depre- ciation Account In the books of Bharat Ltd:

Balances as a 31.3.2003

Rs.

31.3.2004 Rs.

(26)

Plant 7,50,000 9,70,000

Ancumulated Depreciation 1,80,000 2,40,000

Addition Information:

Plant costing Rs. 1,45000; accumulated depreciation thereon Rs. 70,000, was sold for Rs. 35,000.

a) Compute the amount of Plant purchased, depreciation charged for the year and loss on sale of plant.

b) Show how each of the Items related to the plant will be shown in the cash flow statement.

Q15. . From the following statement calculate the cash generated from operating activities:

Liabilities Rs. Assets Rs.

To Salaries To Rent

To Goodwill written off To Proposed Dividend To Provision for Tax To Net Profit

15,000 7,000 25,000 6,000 10,000 10,000 5,000 25,000 1, 03,000

By Dividend

Received

85,000 12,000 6,000

______ 1,03,000

(27)

Q16. From the following balance sheet of Mohan Ltd. Prepare cash flow statement:

Equity share capital Profit & Loss Bank loan Acc. Depreciation Creditor Proposed dividend 2,00,000 1,60,000 1,00,000 80,000 1,40,000 60,000 3,00,000 2,00,000 80,000 1,00,000 1,20,000 70,000 Fixed assets Stock Debtors Bills Receivable bank 4,00,000 1,30,000 1,00,000 20,000 90,000 6,00,000 1,50,000 60,000 30,000 30,000

7,40,000 8,70,000 7,40,000 8,70,000

Q17. Calculate ‘cash Flows from operating activities’ from the following information:

Particulars 2003 Rs. 2004 Rs.

Debtors

Prepaid Expenses Accrued Income

Income Received in Advance Creditors Bills payable Outstanding Expenses 42,000 2,000 1,500 800 26,000 13,000 8,000 46,000 2,700 1,200 1,000 28,000 11,000 6,000

Profit made during 2004 amounted to Rs. 1,00,000 after taking into account the following adjustments:

Rs.

(i) Profit on Sale of Investment (ii) Loss on Sale of Machine (iii) Goodwill Amortized (iv) Depreciation Charged

2,000 900 3,000 2,900

(28)

Q18. Calculate net-cash flows from operating activities from the following in formation:

Rs.

Profits made during 1996 Transfer to General Reserve Depreciation provided Profit on sale of furniture Loss on sale of machine

Preliminary expenses written off

50,000 10,000 20,000 5,000 10,000 10,000 Additional Information:

1995 Rs. 1996 Rs.

Debtors

Bills Receivable Stock

Prepaid Expenses Creditors

Bills Payable

Outstanding Expenses

10,000 7,000 15,000 2,000 20,000 15,000 3,000

15,000 5,000 18,000 3,000 18,000 25,000 4,000