Cash flow Statement

Illustration 1 Calculate cash flow from operating activities from the following details:

Particulars Amount (Rs.)

Net profit for the year 22014 12,00,000
Account receivable as on January 1, 2014 4,00,000
Account receivable as on December 31, 2014 3,50,000
Ans. Cash flow from operating activities = 12,50,000

Illustration 2. Calculate cash generated from operations from the following information:

Particulars Amounts
Net profit 56,000
Opening inventory 22,000
Closing inventory 18,000
Ans. Cash flow from operating Activities = 60,000

Illustration 3. From the following information, calculate cash flow from operating activities.

Particulars Amount (Rs.)

Profit made during the year 2014 Rs. 1,20,000
Account payable as on January 1, 2014 Rs. 28,000
Account payable as on December 31, 2014 Rs. 32,000
Ans. Cash flow from operating Activities = 1,24,000

Illustration 4. From the following information, calculate cash flow from operating activities.

Particulars Amount (Rs.)

Revenue from operations 5,60,000
Closing inventory 40,000
6,00,000
Less purchases (4,10,000)
Opening inventory (30,000)
Gross profit 1,60,000
additional information:

March 31

2013 2014
1,20,000 90,000
80,000 85,000

Ans. Cash flow from operating activities = 1,85,000

Illustration 5. From the following items, you are required to calculate cash from operating activities
for the year ended 31st December, 2014.

Particulars 2013 2014

Presented by Raman Sachdeva

1 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

1. EQUITY AND LIABILITIES:

1. Shareholders’ Funds
(a) Share capital 1,00,000 1,25,000
(b) Reserves and surplus (statement of profit & loss (profit)) 40,250 45,300
2. Non- current liabilities
(a) Long-term borrowing
Bank loan 35,000 12,600
3. Current liabilities
(a) Trade payable 75,000 55,000
(b) Short-term provisions (provision for taxation) 15,000 17,500
2,65,250 2,55,400
II. ASSETS:
1. Non-current Assets
(a) Fixed Assets
(i) Buildings 1,00,000 95,000
(ii) Plant 75,000 84,500
2. Current Assets
(a) Inventory 50,000 37,000
(b) Account receivable 40,000 32,000
(c) Cash 250 2,800
(d) Bank --- 4,000
2,65,250 2,55,400

Ans. Cash flow operating activities = 8,450

Illustration 6. From the following items, calculate cash flow operating activities:

Particulars 2013 2014

EQUITY AND LIABILITIES:
Share capital 2,60,000 2,75,000
Reserves and surplus statement of profit and loss (profit) 43,500 73,500
Long-term borrowing
Mortgage --- 5,000
Current liabilities
Account payable 27,000 25,000
Total 3,30,500 3,78,500

ASSETS:
Non-current Assets
Land and building 1,70,000 1,70,000
Plant 75,000 1,05,000
Current Assets
Inventory 24,000 18,000
Account receivable 48,000 57,000
Cash 13,500 28,500
Total 3,30,500 3,78,500
Ans. Cash flow from operating activities = 25,000

Presented by Raman Sachdeva

2 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Illustration 7. The following is the position of current assets and current liabilities of X limited:

Particulars 2013 (Rs.) 2014 (Rs.)

Account receivable 20,000 5,000
Account payable 10,000 8,000
Bills receivable 6,000 8,000
Prepaid expenses 8,000 7,000
The company incurred a loss of Rs. 50,000 during the year. Calculate cash flow from operating
activities.

Ans. Cash used in opening activities = 38,000

Illustration 8. Calculate cash flow from operating activities from the following balances:

Particulars 2013 (Rs.) 2014 (Rs.)

Account receivable 40,000 30,000
Bills receivable 8,000 10,000
Accounts payable 20,000 15,000
Outstanding expenses 700 800
Bills payable 35,000 20,000
Accrued income 5,000 7,500
Statement of profit and loss (profit) 40,000 70,000
Ans. Cash flow from operating activities = 15,600

Illustration 9. Calculate cash flow from operating activities, from the following details:

Particulars 31.03.2014 (Rs.) 31.03.2013 (Rs.)

Balance in statement of profit and loss 55,000 60,000
Trade receivables 25,000 31,000
Outstanding rent 12,000 21,000
Goodwill 40,000 38,000
Prepaid expenses 4,000 2,000
Trade payables 13,000 19,000

Illustration 10. The profit of Philips Ltd. after appropriations was Rs. 2,50,000. the profit was arrived
at after taking into consideration the following items:

S. No. Particulars (Rs.)

1 Depreciation on fixed tangible assets (machinery) 20,000
2 Loss on sales of fixed tangible assets (Furniture) 2,000
3 Goodwill written off 9,000
4 Provision for taxation 35,000
5 Transfer to general reserve 17,500
6 Gain on sale of fixed tangible assets (machinery) 8,000
Additional information:

Presented by Raman Sachdeva

3 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Particulars 31.03.2011 (Rs.) 31.03.2012 (Rs.)

Trade receivable (all good) 50,000 62,000
Trade payables 45,000 55,000
Inventory 12,000 8,000
Income received in advance 8,000 ----
Outstanding expenses 6,000 3,000
Prepaid expenses ---- 5,000
You are required to calculate cash from operating activities:

Ans. Cash flow from operating activities = 2,76,500

Illustration 11. (Calculate of cash flow investing activities). Calculate cash flow from investing
activities from the following information: Rs.
purchase of machinery Rs. 5,00,000; sale of machinery 70,000
goodwill purchased Rs. 22,00,000; investment sold 1,00,000
investment purchased Rs. 3,00,000; Patents sold 80,000
Interest received on debentures hold as investment 8,000
Dividend received on shares held as investment 12,000
A piece of building was purchased as investment out of surplus. It was let out for commercial use and
rent received Rs. 40,000.
Ans. Net cash used in investing activities = 6,90,000

Illustration 122. (Cash flow from investing activities). from the information given below, calculate
cash flow from investing activities.

Particulars 2013 (Rs.) 2014 (Rs.)

Investment in land 4,00,000 4,00,000
Shares in Sonam Ltd. 3,00,000 3,00,000
12% long-term investment 1,00,000 1,60,000
Plant and machinery 12,00,000 15,00,000
Patent 2,00,000 1,40,000
Goodwill 2,00,000 3,00,000
Additional information:
(i) The piece of land was purchased out of surplus for investment purposes and let out. it realised Rs.
40,000 as rent.
(ii) Dividend received from Sonam Ltd. @ 12%.
(iii) Patents written off to the extent of Rs. 40,000. Some patents were sold at a profit of Rs. 20,000.
(iv) A price of machine costing Rs. 1,60,000 (Depreciation provided thereon Rs. 60,000) was sold for
Rs. 70,000. Depreciation charged during the year was Rs. 1,40,000.
(v) During the year 12% investments were purchased for Rs. 2,00,000 and some investments were
sold at a profit of Rs. 20,000. Interest on investment was received for the year.
Ans. Net cash used in investing activities = 4,70,000

Presented by Raman Sachdeva

4 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Illustration 13. A company had had the following balances.

Investment at the beginning of the period 3,40,000
Investment the end of the period ,80,000
During the year the company had sold 40% of its investment held in the beginning of the period at a
profit of Rs. 84,000.
Calculate cash flow investing activities.
Ans. Net cash flow from investing activities = 1,44,000.

Illustration 14. From the following information, calculate cash flow investing activities:

Particulars Opening Closing

Machinery (at cost) 20,000 21,000
Accumulated depreciation 5,000 5,500
During the year a machine costing Rs. 2,000 with accumulated depreciation of 1,200 was sold for Rs.
1,000.
Ans. Net cash used in investing activities = 2,000.

Illustration 15. XYZ Ltd., Provided the following information, Calculate net cash flow from financing
activities.
Particulars 31.3.2011 (Rs.) 31,3,2012 (Rs.)
Equity share capital 10,00,000 12,00,000
12% long-term borrowing (debenture 1,00,000 2,00,000
Additional information:
(i) Interest paid on debenture Rs. 12,000
(ii) Dividend paid Rs. 50,000
Ans. Net cash flow from financing activities = 2,38,000

Illustration 16. From the following information, calculate net cost flow from financing activities.

Particulars 31.3.2014 (Rs.) 31.3.2015 (Rs.)

Preference share capital 12,00,000 15,00,000
15% bank loan 4,50,000 3,00,000
Bank overdraft 25000 15000
Securities premium 1,20,000 1,50,000
Cash credit 40,000 50,000
Additional information:
(i) Interest paid on bank loan Rs. 56,250
(ii) Dividend paid Rs. 1,25,000
Ans. Net cash used in financing Activities = 1,250.

Illustration 17. (Calculate of cash flow from financing activities).

Presented by Raman Sachdeva

5 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Particulars Issued Redeemed

April1, 2013 April 1, 2014
(i) Equity share capital Rs. 3,00,000 ----
(ii) 15% preference share capital ---- Rs. 3,00,000
(iii) 12% Debentures Rs. 1,50,000 ----
(iv) Equity shares were issued at a premium of 10%.
(v) 15% preference shares were redeemed at a premium of 5%
(vi) 12% debentures were issued at a discount of 2%.
(vii) Interim dividend paid on equity shares Rs. 1,20,000
(viii) Dividend paid on old preference share Rs. 96,000.
(ix) Underwriting commission on issue of equity shares Rs. 15,000.
(x) Interest paid on old debenture, Rs. 42,000.
Ans. Net cash used in financing activities = (1,11,000)

Illustration 18. From the following information, calculate net cash flow from financing activities.

Particulars 31.3.2012 (Rs.) 31.3.2013 (Rs.)

Equity share capital 4,00,000 5,00,000
10% debentures 1,50,000 1,00,000
Securities premium 40,000 50,000
Interest paid on debentures 10,000.
Ans. Net cash flow from financing activities = 50,000.

Illustration 19. From the following information, calculate cash flow from investing activities and
financing activities:
Particulars Opening Closing
Furniture at cost 1,00,000 1,80,000
Accumulated depreciation on furniture 60,000 90,000
Capital 5,00,000 7,00,000
Bank overdraft 2,50,000 1,50,000
During the year furniture costing Rs. 40,000 was sold at a profit of Rs. 30,000. Depreciation on
furniture charged during the year amounted to Rs. 50,000.
Ans. Net cash used in investing activities = 70,000

Illustration 20. (When no provision for depreciation account is maintained). The following for the
year 2013 and 2014.
Particulars 2014 2013
Machinery 15,000 1,000
Additional information:
(1) Depreciation the year amounted to Rs. 2,000.
(2) Machine costing Rs. 2,000 on which depreciation has accumulated Rs. 500, was for Rs. 1,000.
Show the effect of above adjustments on the calculation of cash flow from operating activities,
investing activities and financing activities as per AS – 3.
Ans. Cash flow from operating activities = 2,500
Cash outflow from investing activities = 7,500

Presented by Raman Sachdeva

6 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Illustration 21. (When provision for depreciation account is maintained). The following is the abstract
of balance the above adjustment on the calculate of cash flow from operating activities and financing
activities.
Ans. Cash flow from operating activities = 20,000
Cash outflow from investing activities = 60,000

Illustration 22. From the following information show the effect of provision for tax on Cash flow
statement.
Particulars 2014 2013
Provision for taxation 20,000 15,000
Additional information:
(i) Income tax paid during the year amounted to Rs. 3,000.

Illustration 23. From the following given items show effect of proposed divided on cash flow
statement:
Particulars 2014 (Rs.) 2013 (Rs.)
Proposed dividend 1,50,000 1,00,000
Additional information:
(1) Dividend paid during the year Rs. 10,000.

Illustration 24. From the following information, prepare a cash flow statement.

Particulars Amount (Rs.)

Opening cash balance 15,000
Closing cash balance 17,000
Decrease in inventory 8,000
Increase in bills payable 12,000
Sale of fixed assets 30,000
Repayment of long-term loan 50,000
Net profit for the year 2,000
Ans. Cash balance at the end of the year = 17,000.

Illustration 25. From the following balance sheet of S.M. Industries, prepare a cash flow statement.
show your working clearly.

Particulars Note No. 31.3.13 (Rs.) 31.3.14 (Rs.)

1. EQUITY AND LIABILITIE
1. Shareholders funds
(a) Share capital 60,000 55,000
(b) Reserve and surplus 34,000 26,000
2. Current Liabilities: 12,000 13,000
Total 1,06,000 94,000

Presented by Raman Sachdeva

7 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

II. ASSETS
1. Non-current assets
(a) Fixed assets
(i) Tangible assets 1 60,000 50,000
(ii) Intangible assets 2 30,000 25,000
2. Current assets
(a) Inventories 10,000 9,000
(b) Cash and cash equivalents 6,000 10,000
Total 1,06,000 94,000
Additional information:
Depreciation of Rs. 20,000 on plant and machinery was charged to statement of profit and loss.

Illustration 25:From the following Balance Sheet and Information, Prepare Cash Flow Statement:
Balance Sheets as at 31st March 2017 and 2016

Particulars Note No. 31st March, 31stMarch

2017 (Rs) 2016 (Rs)
I. EQUITY AND LIABILITIES
1. shareholders’ Funds
(a) Share Capital 8,00,000 5,00,000
(b) Reserves and surplus:
Surplus, i.e., Balance in statement of profit 3,50,000 2,00,000
and loss
2. Non- Current Liabilities
Long – term Borrowings: 6% Debentures 1,00,000 1,00,000
3. Current Liabilities
(a) Short-term Borrowings: Bank Loan 50,000 ….
(b) Trade Payables 1 75,000 1,00,000
(c) Short-term Provisions: Provision for Tax 65,000 50,000
Total 14,40,000 9,50,000
II. ASSETS
1. Non- Current Assets
(a) Fixed Assets:
(i) Tangible Assets 2 5,20,000 7,00,000
(ii) Intangible Assets: Goodwill 50,000 1,00,000
(b) Non- current investments 2,70,000 ….
2. Current Assets
(a) Current Investments 3 90,000 ….
(b) Inventories 50,000 60,000
(c) Trade Receivables 80,000 40,000
(d) Cash and Cash Equivalents: Cash and Bank 3,80,000 50,000
Balance
Total 14,40,000 14,40,000
Notes to Accounts

Particulars 31st March 2017 31ST March 2016

(Rs) (Rs)

Presented by Raman Sachdeva

8 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

1. Trade Payables
Creditors 55,000 50,000
Bills Payable 20,000 50,000
75,000 1,00,000
2. Tangible Assets
Building 2,50,000 4,00,000
Plant and Machinery 2,70,000 3,00,000
5,20,000 7,00,000
3. Current Investments
Investment in Securities (Other than Marketable
Securities) 90,000 …..
Additional Information:
1. Rs 50,000 as Interim Dividend was paid during the year.
2. Building is sold at book value.
ANS: Cash Balance at the end: 3,80,000

Illustration 26: Following are the Balance Sheets of Wisben Ltd. as at 31 st March, 2012:
Particulars Note No. 31st March, 31st March,
2012 (Rs) 2011 (Rs)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 7,00,000 6,00,000
(b) Reserves and Surplus
(Surplus, i.e., Balance in Statement of 2,00,000 1,10,000
Profit and Loss)
2. Non- Current Liabilities
Long- term Borrowings 3,00,000 2,00,000
3. Current Liabilities
Trade Payables 30,000 25,000
Total 12,30,000 9,35,000
II. ASSETS
1. Non- Current Assets
Fixed Assets:
Tangible Assets 11,00,000 8,00,000
2. Current Assets
(a) Inventories 70,000 60,000
(b) Trade Receivables 32,000 40,000
(c) Cash and Cash Equivalents 28,000 35,000
Total 12,30,000 9,35,000
Additional Information: During the year a piece of machinery of the book value of Rs 80,000 was
sold for Rs 65,000. Depreciation Provided on tangible assets during the year amounted to Rs
2,00,000. Prepare the Cash Flow Statement.
ANS: Cash Balance at the end 28,000

Illustration 27: From the following Balance Sheets of J Ltd. as at 31 st March, 2017 and 31st March,
2016, Prepare the cash Flow Statement:

Presented by Raman Sachdeva

9 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Particulars Note No. 31st March, 31st March

2017 (Rs) 2016 (Rs)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 1 4,50,000 4,50,000
(b) Reserves and Surplus 2 1,86,000 (12,000)
2. Non- Current Liabilities
Long –term Borrowings (8% Debentures) 1,56,000 90,000
3. Current Liabilities
(a) Short-term Borrowings (8% Bank Loan) 24,000 30,000
(b) Trade Payables 72,000 66,000
(c) Short-term provisions 3 30,000 24,000
Total 9,18,000 6,48,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets (Net) 5,16,000 3,72,000
(ii) Intangible Assets (Goodwill) 9,000 24,000
(b) Non- Current Investments 75,000 48,000
2. Current Assets
(a) Current Investments 3,000 9,000
(b) Inventories 1,17,000 60,000
(c) Trade Receivables 1,20,000 1,20,000
(d) Cash and Cash Equivalents 78,000 15,000
Total 9,18,000 6,48,000
Note to Accounts
Particulars 31st March, 31st March
2017 (Rs) 2016(Rs)
1. Share Capital
Equity Share Capital 3,30,000 2,70,000
10% Preference Share Capital 1,20,000 1,80,000
4,50,000 4,50,000
2. Reserves and Surplus
Securities Premium Reserve 6,000 ….
General Reserve 90,000 72,000
Surplus, i.e., Balance in Statement of Profit and Loss 90,000 (84,000)
1,86,000 (12,000)
3. Short- term Provisions
Provision for Tax 3,000 24,000
Additional Information:
(i) During the year a piece of machinery costing Rs 36,000 on which depreciation charged was Rs
12,000 was sold for Rs 12,000. Depreciation provided on Tangible Assets Rs 36,000.
(ii) Income Tax Rs 27,000 was provided.
(iii)Additional Debentures were issued at par on 1st October, 2016 and Bank Loan was repaid on the
same date.
(iv)At the end of the year Preference Shares were redeemed at a premium of 5%.

Presented by Raman Sachdeva

10 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co
 Cash flow Statement

Illustration 28: From the following Balance Sheets of A Ltd., prepare Cash Flow Statement as per AS-
3 (Revised), as at 31st March, 2017:
Balance Sheet as at 31st March 2017 and 2016
Particulars Note No. 31ST March, 31st March,
2017 (Rs) 2016 (Rs)
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
(a) Share Capital : Equity Share Capital 2,00,000 2,00,000
(b) Reserves and Surplus:
Surplus, i.e., Balance in Statement of Profit 90,000 50,000
and Loss
2. Current Liabilities
(a) Short-term Borrowings: Cash Credit …. 10,000
(b) Trade Payables 20,000 15,000
(c) Other Current Liabilities 5,000 5,000
(d) Short-term Provisions: Provision for Tax 25,000 20,000
Total 3,40,000 3,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets 2,75,000 2,35,000
2. Current Assets
(a) Inventories 15,000 25,000
(b) Trade Receivables 20,000 10,000
(c) Cash and Cash Equivalents 30,000 30,000
Total 3,40,000 3,00,000
Notes to Accounts
Particulars 31st March 2017 31st March 2016
(Rs) (Rs)
1. Other Current Liabilities
Outstanding Expenses 1,000 5,000
Unclaimed Dividend 4,000
5,000 5,000
2. Cash and Cash Equivalents
Cash 10,000 8,000
Bank 20,000 22,000
30,000 30,000
Additional Information:
Net Profit for the year after providing Rs 20,000 for depreciation was Rs 60,000. During the year, the
company declared the interim Dividend@ 10% and paid Rs 15,000 as income Tax.

Presented by Raman Sachdeva

11 B.Com (H), M.Com, MBA, M.Phil, AMT, NET
17/2 (LGF) Jangpura Road, Bhogal
011-24377255, 011-40204655, 9811957255,
www.solutionsacademy.co