Revision - Cash Flow Statement

Part - A (2 marks Question)

1. State whether the following transactions will result in inflow, outflow or no flow of cash while preparing cash flow
statement:
(i) Decrease in outstanding employees benefits by ₹3000
(ii) Increase in Current Investment by ₹ 6,000.
2. Classify the following into Cash Flows from-
Operating Activities; Investing Activities; Financing Activities.
a. Cash sale of goods in cash
b. Cash payment to acquire fixed assets
c. Cash payments from issuing shares at a premium
d. Payment of dividend
e. Interest received on Investment
f. Interest Paid on debentures
g. payment of income tax
h. Cash repayment of long term loans
i. Cash payment of salaries and wages to employees
3. A company had following balances
investment in the beginning = 34000
investment at the end = 28000
During the year, the company sold 40% of its investments held in the beginning of the period at a profit of 8400.
calculate cash flow from investing activity.
4. Kaveri Ltd a financing company obtained loans and advances of Rs 5,00,000 during the year @ 12% per annum. In
which activity will it be included while preparing cash flow statements?
5. ABC Ltd, has Plant and machinery whose written down value on April 1, 2017, was 86000 and on 31st March 2018
was 95000. Dep for the year was 4000. In the beginning of the year, a part of the plant was sold for 2500 and which
has a written down value of 2000. Calculate cash flow from Investing activities.
6. From the following particulars from Rajeshwar Ltd., calculate Cash Flow from Financing Activities:
Particulars 2006(Rs.) 2007(Rs.)
Equity Share Capital 6,00,000 10,00,000
18% Preference Share Capital 4,00,000 3,00,000
Securities Premium 1,00,000 2,60,000
14% Debentures 2,00,000 2,50,000
Discount on Debentures 5,000 6,000
Underwriting commission on the issue of shares - 20,000
Additional Information:
a. The dividend on preference shares and an interim dividend @ 15% were paid on equity shares on March 31,
2007.
b. Preference shares were redeemed on March 31, 2007 at a premium of 5%. Such a premium has been
provided out of profit.
c. New shares and debentures were issued on March 31, 2007.
7. G Ltd is carrying on a paper manufacturing business. In the current year, it purchased machinery for Rs. 30,00,000;
it paid salaries of Rs.60,000 to its employees, it required funds for expansion and therefore, issued shares of Rs.
20,00,000. It earned a profit of Rs. 9,00,000 for the current year. Find out cash flows from operating activities.
8. From the following extract of Balance sheets of Vanijya Ltd.as at 31st march 2010 and 2011. Find net profit before
tax.

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 Particulars Note no 31st March 2011 31st March 2010
Equity and Liabilities
Shareholders fund
sahre capital 65000 45000
Reseerve and surplus 1 42500 24000
Notes to accounts
Particulars 31 march 2011 Mar 31, 2010
General Reserve 27500 15000
Surplus 15000 9000
42500 24000
Additional Information
An interior dividend of 7000 has been paid to shareholders during the year.
9. Net profit of a company before tax is Rs. 12,50,000 as on 31st March 2003, after considering the following:
Rs.
Depreciation on Fixed Assets 25,000
Goodwill written off 15,000
Loss on Sale of Machine 12,000
The current assets and current liabilities of the company in the beginning and at the end of the year were:
Particulars 31.3.2002(Rs.) 31.3.2003(Rs.)
Bills Receivable 25,000 15,500
Bills Payable 10,000 12,500
Debtors 30,000 38,800
Stock in Hand 18,000 14,000
Calculate Cash Flow from Operating Activities.
10. From the following particulars, calculate the cash flow from Investing Activities:
Purchases(Rs.) Sales(Rs.)
Investments 1,80,000 1,00,000
Goodwill 2,00,000 ---
Machinery 4,40,000 1,50,000
Patents --- 1,00,000
Interest received on Debentures held as an investment Rs. 16,000.
Dividend received on Shares held as investment Rs. 20,000.
A plot of land was purchased out of surplus funds for investment purposes and was let out for commercial use. Rent
received was Rs. 80,000.
11. Following is the extract of the Balance Sheet as at 31st March, 2019 of a company:
31st March, 2019 (₹) 31st March, 2018 (₹)
Equity Share Capital 9,00,000 7,00,000
12% Preference Share Capital 3,00,000 5,00,000
Securities Premium Reserve 1,40,000 1,00,000
12% Debentures 4,00,000 3,00,000
Additional Information:
a. Interim dividend on Equity Shares at the end of the current year was paid @ 15%.
b. Dividend on Preference Shares was paid.
c. Preference Shares were redeemed at a premium of 5% on 31st March, 2019.
d. New shares and debentures were issued on the last date of current year.
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 Determine Cash Flow from Financing Activities.
12. From the following information, calculate Cash Flow from Investing Activities:
₹
Purchase of Machine 2,50,000
Purchase of Goodwill 1,00,000
Sale of Machine 35,000
Sale of Investment 50,000
Purchase of Investment 1,50,000
Sale of Patents 40,000
Interest and Dividend Received 10,000
A building was purchased as investment out of surplus which was let out for commercial purposes. Rent received ₹
20,000.
13. From the following information, calculate Cash Flow from Financing Activities:
1st April, 31st March,
2018 ₹ 2019 ₹
Long-term Loan 2,00,000 2,50,000
During the year, the company repaid a loan of ₹ 1,00,000.
14. From the following information, calculate Cash Flow from Financing Activities:
1st April, 31st March,
2018 ₹ 2019 ₹
Long-term Loan 2,00,000 2,50,000
During the year, the company repaid a loan of ₹ 1,00,000.
15. From the following information, calculate Cash Flow from Financing Activities:
Particulars 31st March, 2019 31st March, 2018
₹ ₹
Equity Share Capital 10,00,000 9,00,000
Securities Premium Reserve 2,60,000 2,50,000
12% Debentures 1,00,000 1,50,000
Additional Information: Interest paid on debentures ₹ 18,000.
16. The following is the position of Current Assets and Current Liabilities of Z Ltd:
31-3-2016 31-3-2017
₹ ₹
Provision for doubtful debts 1,000 -
Short-term Loans 10,000 19,000
Creditors 15,000 10,000
Bills Payable 20,000 40,000
The company incurred a loss of ₹ 45,000 during the year. Calculate Cash from operating activities.
17. Prepare Provision for Income Tax Account from the following information for preparing Cash Flow Statement:
EQUITY AND LIABILITY SIDE OF BALANCE SHEET
31-03-2016 31-03-2017
₹ ₹
Provision for Income Tax 3,20,000 4,00,000
Additional Information:
During the year Income Tax paid was ₹ 2,80,000.
18. Calculate Cash Flow from Investing Activities from the following particulars:
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 1st April, 2018 31st March, 2019
₹ ₹
Plant & Machinery 7,20,000 8,60,000
Information:
a. Depreciation charged during the year ₹ 85,000.
b. Plant & Machinery having a written down value of ₹ 1,10,000 was sold for ₹ 1,25,000.
Part - B (5 marks Question)
19. On the basis of information given by Aradhana Ltd., prepare Cash Flow Statement for the year ending 31st March,
2021: 5
Aradhana Ltd.
Balance Sheet as on 31st March, 2021
Particulars Note No. 31st March, 2020 31st March, 2021
I. Equity and Liabilities
1. Shareholder’s Funds
(a) Share Capital 5,00,000 7,30,000
(b) Reserves and Surplus 1 3,50,000 3,70,000
2. Non-current Liabilities
Long-term Borrowings 2 4,00,000 2,00,000
3. Current Liabilities
(a) Trade Payables 3 3,60,000 4,60,000
(b) Short Term provisions 4 3,25,000 3,20,000
Total 19,35,000 20,80,000
II. Assets
1. Non-current Assets
(a) Fixed Assets
(i) Tangible Assets 5 4,50,000 5,00,000
(ii) Intangible Assets 6 3,10,000 3,02,000
(b) Long-term Loans and Advances 4,00,000 4,30,000
2. Current Assets
(a) Inventories 2,70,000 2,90,000
(b) Trade Receivables 2,40,000 2,60,000
(c) Cash and Cash Equivalents 2,65,000 2,98,000
Total 19,35,000 20,80,000
Note to Accounts
Particulars 31st March 2020 31st March 2021
1. Reserves and Surplus
Statement of Profit and loss 3,50,000 3,70,000
2. Long-term Borrowings
10% Debentures 4,00,000 2,00,000
3. Trade Payables
Creditors 2,40,000 2,60,000
Bills Payable 1,20,000 2,00,000
3,60,000 4,60,000
4. Short-Term Provisions

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 Provision for Tax 3,25,000 3,20,000
5. Tangible Fixed Assets
Machinery 5,50,000 6,60,000
Less: Provision for Depreciation 1,00,000 1,60,000
6. Intangible Fixed Assets
Patents 3,10,000 3,02,000
Additional Information:
a. Debentures were redeemed on 1st April,2020.
b. Tax paid during the year ₹2,80,000.
20. From the following Balance Sheets of Ranjan Ltd. prepare Cash Flow Statement:
Liabilities 2001 2002 Assets 2001 2002
Equity Share Capital 1,50,000 2,00,000 Goodwill 36,000 20,000
12% Pre. Share Capital 75,000 50,000 Building 80,000 60,000
General Reserve 20,000 35,000 Plant 40,000 1,00,000
Profit and Loss A/c 15,000 24,000 Debtors 1,19,000 1,54,500
Creditors 37,500 49,500 Stock 10,000 15,000
... Cash 9,000 12,500

2,97,500 2,58,500 2,97,500 3,58,500

Depreciation charged on the plant was Rs. 10000 and building Rs. 60000.
21. From the following particulars, calculate Cash Flow from Investing Activities:
Particulars 31st March, 2020 31st March, 2019
₹ ₹
Investments in Land 3,00,000 3,00,000
Shares in Damodar Ltd. 1,50,000 1,50,000
12% Long-term Investments 80,000 50,000
Plant and Machinery 7,50,000 6,00,000
Patents 70,000 1,00,000
Goodwill 1,50,000 1,00,000
Additional Information:
i. A piece of land was purchased as an Investment out of surplus. It was let out for commercial purpose and
the rent received was ₹ 20,000.
ii. Dividend received from Damodar Ltd. @ 12%
iii. Patents written off to the extent of ₹ 20,000. Some patents were sold at a profit of ₹ 10,000.
iv. A machine costing ₹ 80,000 (depreciation provided thereon ₹ 30,000) was sold for ₹ 35,000. Depreciation
charged during the year was ₹ 70,000.
v. During the year 12% investments were purchased for ₹ 1,00,000 and some investments were sold at a profit
of ₹ 10,000. Interest on investments for the year was duly received
23. From the following information calculate cash flow from investing activities:
Particulars 31.03.2014 Rs. 31.03.2015 Rs.
Machinery (at Cost) 5,00,000 5,50,000
Accumulated Depreciation 1,00,000 1,20,000
Patents 2,00,000 1,20,000
Goodwill 1,50,000 1,00,000
Investment 2,50,000 5,00,000
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 Additional Information:
i. During the year, a machine costing Rs. 50,000 with its accumulated depreciation of Rs. 25,000 was sold for
Rs. 20,000.
ii. Patents were written off to the extent of Rs. 60,000 and some patents were sold at a profit of Rs. 10,000.
iii. 40% of the investments held in the beginning of the year were sold at 10% Profit.
iv. Interest received on investment Rs. 25,500.
v. Dividend received on investment Rs. 8,500.
vi. Rent received Rs. 5,000.
24. From the following Balance Sheet and information of Light Ltd., prepare Cash Flow Statement:
Particulars Note No. 31st March, 2019 31st March, 2018
₹ ₹
1. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 1 4,50,000 5,00,000
(b) Reserves and Surplus 2 2,55,000 1,00,000
2. Non-Current Liabilities
Long-term Borrowings (8% Debentures) 2,00,000 1,00,000
3. Current Liabilities
(a) Trade Payables 1,33,000 46,000
(b) Other Current Liabilities 3 5,000 10,000
(c) Short-term Provisions (Provision for Tax) 12,000 24,000
Total 10,55,000 7,80,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets: 6,20,000 5,10,000
(b) 10% Investments 80,000 30,000
2. Current Assets
(a) Current Investments 10,000 8,000
(b) Inventories 90,000 1,00,000
(c) Trade Receivables 4 1,85,000 90,000
(d) Cash and Cash Equivalents 70,000 42,000
Total 10,55,000 7,80,000
Notes to Accounts
Particulars 31st March, 2019 31st March, 2018
₹ ₹
1. Share Capital
Equity Share Capital 3,50,000 3,00,000
12% Preference Share Capital 1,00,000 2,00,000
4,50,000 5,00,000
2. Reserves and Surplus
Securities Premium Reserve 5,000 -
Surplus, i.e., Balance in Statement of Profit and Loss 2,50,000 1,00,000
3. Other Current Liabilities
Premium on Redemption of Preference Shares 5,000 10,000

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4. Trade Receivables
Sundry Debtors 2,00,000 1,00,000
Less: Provision for Doubtful Debts 15,000 10,000
1,85,000 90,000
You are informed that during the year:
a. A machine with a book value of ₹ 40,000 was sold for ₹ 25,000.
b. Depreciation charged during the year was ₹ 70,000
c. Preference Shares were redeemed an 31st December, 2018 at a premium of 5%.
d. An Interim Dividend 15% was paid on Equity Shares on 31st January, 2019.
e. Dividend 12% was proposed on Preference Shares for the year ended 31st March, 2019 on ₹
1,00,000 and for the year ended 31st March, 2018 on ₹ 2,00,000.
f. Fresh Equity Shares were issued at a premium of 10% on 31st March, 2019.
25. From the following Balance Sheet and information of Sun Ltd., prepare Cash Flow Statement:
Particulars Note No. 31st March, 2019 31st March, 2018
₹ ₹
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 1 7,00,000 6,00,000
(b) Reserves and Surplus 2 4,10,000 2,00,000
2. Non-Current Liabilities
Long-term Borrowings (10% Debentures) 3,00,000 2,00,000
3. Current Liabilities
Trade Payables 1,40,000 60,000
Total 15,50,000 10,60,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets - Tangible 7,00,000 6,00,000
(b) 10% Investments 2,00,000 1,00,000
2. Current Assets
(a) Current Investments 90,000 50,000
(b) Inventories 2,00,000 1,00,000
(c) Trade Receivables 3 2,80,000 1,90,000
(d) Cash and Cash Equivalents 80,000 20,000
Total 15,50,000 10,60,000
Note to Accounts
Particulars 31st March, 2019 31st March, 2018
₹ ₹
1. Share Capital
Equity Share Capital 5,00,000 3,00,000
10% Preference Share Capital 2,00,000 3,00,000
7,00,000 6,00,000
2. Reserves and Surplus
Securities Premium Reserve 10,000 -
Surplus, i.e., Balance in Statement of Profit and Loss 4,00,000 2,00,000

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 4,10,000 2,00,000
3. Trade Receivables
Sundry Debtors 3,00,000 2,00,000
Less: Provision for Doubtful Debts 20,000 10,000
2,80,000 1,90,000
You are informed that during the year:
Proposed Dividend: 31st March, 2019 31st March, 2018
Equity Share Capital Nil Nil
Preference Share Capital 10% 10%
a. A machine with a book value of ₹ 90,000 was sold for ₹ 50,000;
b. Depreciation charged during the year ₹ 60,000;
c. Debentures were issued on 1 st April, 2018;
d. Investments were purchased on 31 st March, 2019;
e. Preference shares were redeemed on 31 st December, 2018;
f. An interim dividend @ 15% was paid on equity shares on 31 st December, 2018;
g. Fresh equity shares were issued at a premium of 5% on 31 st March, 2019.
26. From the following Balance Sheets of Sunlight Ltd. prepare a Cash-Flow Statement for the year ended 31st March
2018.
Particulars Note No. 31.3.2018 31.3.2017
₹ ₹
I. EQUITY AND LIABILITIES:
(1) Shareholder’s Funds:
(a) Share Capital 4,50,000 3,80,000
(b) Reserve & Surplus 1 2,06,000 1,74,000
(2) Non-Current Liabilities:
Long-term Borrowings 2 75,000 50,000
(3) Current Liabilities:
(a) Short-term Borrowings 3 50,000 20,000
(b) Trade Payables 4 43,000 42,000
TOTAL 8,24,000 6,66,000
II. ASSETS:
(1) Non-Current Assets:
(a) Fixed Assets 2,10,000 1,75,000
(b) Non-Current Investments 5 40,000 25,000
(2) Current Assets:
(a) Inventory 3,00,000 2,80,000
(b) Trade Receivables 2,44,000 1,52,000
(c) Cash and Bank Balances 30,000 34,000
TOTAL 8,24,000 6,66,000
Notes:
Reserve & Surplus : 31.3.2018 31.3.2017
₹ ₹

General Reserve 1,40,000 1,00,000

Profit & Loss Balance 66,000 74,000
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 2,06,000 1,74,000
Long-term Borrowings :

10% Public Deposits 75,000 50,000

Short-term Borrowings :

Cash Credit 50,000 20,000

Trade Payables :

Sundry Creditors 35,000 28,000

Bills Payables 8,000 14,000
43,000 42,000
Rate of Interest on Non-Current Investments: 12% p.a.

Additional Information:
a. A new machinery was purchased for ₹ 50,000 during the year.
b. Non-Current Investments costing ₹ 25,000 were sold at a loss of ₹ 3,000 at the end of the year.
27. Prepare a Cash Flow Statement on the basis of the information given in the balance sheet of ABC Ltd., as at
31.03.2018 & 2017.
Particulars Note No. 31.3.2018 31.3.2017
₹ ₹
I. EQUITY AND LIABILITIES:
(1) Shareholder’s Funds
(a) Share Capital 70,000 60,000
(b) Reserves and Surplus 1 44,000 8,000
(2) Non-Current Liabilities
(a) Long-term Borrowings 50,000 50,000
(3) Current Liabilities
(a) Trade Payables 2 25,000 9,000
TOTAL 1,89,000 1,27,000
II. ASSETS:
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 98,000 84,000
(b) Non-Current Investments 16,000 6,000
(2) Current Assets
(a) Current investments 18,000 20,000
(b) Inventories 49,000 12,000
(c) Cash and Bank Balances 8,000 5,000
TOTAL 1,89,000 1,27,000
Notes to Accounts:
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 Reserve & Surplus: 31.03.2018 31.03.2017
₹ ₹
General Reserve 30,000 20,000
Surplus i.e. Balance in Statement of Profit and Loss 14,000 (12,000)
44,000 8,000
Trade Payables:

Sundry Creditors 23,500 6,500

Bills Payable 1,500 2,500
25,000 9,000
Additional Information :
a. Depreciation provided on tangible assets (Machinery) during the year ₹ 8,000.
b. Interest paid on debentures ₹ 5,000.
28. Following are the Balance sheet of Vaishnavi Ltd.as follows :
Particulars Note No Mar 31,2019 Mar 31,2018
Equity & Liability
share Capital 70000 40000
Balance in statement of profit & loss (32000) (5000)
9% debenture 40000 20000
Trade Payable 15000 11000
Outstanding Expense 2000 1000
Totoal 95000 67000
Assets
Fixed Asset 50000 30000
Investment 14000 20000
Stock 0000 5000
debtors 17000 10000
Cash 4000 2000
Total 95000 67000
Additional Information:
Included in the fixed asset was a piece of machinery costing 7000 on which dep charged was 4000 and it was sold
for 3000. During the year 14000 dep was charged on fixed assets.
Prepare a cash flow statement.
29. From the following balance sheet of JY Ltd as at 31st March, 2017, prepare a cash flow.
Particulars Note No. 31st March, 2017 (Rs.) 31st March, 2016 (Rs.)
I EQUITY AND LIABILITIES
(1) Shareholder's Funds
(a) Share Capital 5,00,000 5,00,000
(b) Reserves and Surplus 1 1,00,000 (25,000)
(2) Non-current Liabilitites
Long-term Borrowings 2 2,50,000 1,50,000
(3) Current Liabilities
(a) Short-term Borrowings 3 1,50,000 1,00,000
(b) Short-term Borrowings 4 1,25,000

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 Total
II ASSETS
(1) Non-current Assets
(a) Fixed Assets 5 6,00,000 4,50,000
i. Tangible
(2) Current Assets
Table Receivables 2,75,000 2,25,000
Cash and Cash Equivalents 1,25,000 75,000
Short-term Loans and Advances 2,00,000 1,00,000

Total
Note to Accounts
Note No. Particulars 31st March, 2017 31st March 2016
(Rs.) (Rs.)
1. Reserves and Surplus
(Surplus, i.e., Balance in the statement of Profit and 1,00,000 (25,000)
Loss)
1,00,000 (25,000)
2. Long-term Borrowings
10% Debentures 2,50,000 1,50,000
2,50,000 1,50,000
3. Short-term Borrowings
Bank Overdraft 1,50,000 1,00,000
1,50,000 1,00,000
4. Short-term Provisions
(i) Proposed Dividend 75,000 50,000
(ii) Provision for Tax 1,25,000 75,000
2,00,000 1,25,000
5. Tangible Assets
Machinery 7,37,500 5,25,000
Accumulated Description (1,37,500) (75,000)
6,00,000 4,50,000
Additional Information
Rs.1,00,000, 10% debentures were issued on 31st March, 2017.
30. Following is the balance sheet of MM Ltd as on 31st March, 2015.
Particulars Note 31st March,2015 Amt (Rs) 31st March,2014 Amt (Rs)
No.
I. EQUITY AND LIABILITIES
1.Shareholders' Funds
(a) Share Capital 5,00,000 4,00,000
(b)Reserves and Surplus 1 2,00,000 (50,000)
2.Non-current Liabilities
Long-term Borrowings 2 4,50,000 5,00,000
3.Current Liabilites

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(a)Short-term Borrowings 3 1,50,000 50,000
(b)Short-term Provisions 4 70,000 90,000
Total 13,70,000 9,90,000
II.ASSETS
1. Non-current Assets
(a) Fixed Assets
(i) Tangible 5 10,03,000 7,20,000
(ii) Intangible 6 20,000 30,000
(b)Non-current Investments 1,00,000 75,000
2.Current Assets
(a)Current Investments 50,000 60,000
(b)Inventories 7 1,07,000 45,000
(c)Cash and Cash Equivqalents 90,000 60,000
Total 13,70,000 9,90,000
Notes to Accounts
Particulars 31st March, 2015 Amt(Rs) 31st March,2014 Amt (Rs)

1.Reserves and Surplus 2,00,000 (50,000)

Surplus i.e. Balance in Statement of Profit and Loss

2.Long-term Borrowings 4,50,000 5,00,000

12% Debentures
3.Short-term Borrowings 1,50,000 50,000
Bank Overdraft
4.Short-term Provisions 70,000 90,000
Provision for Tax
5.Tangible Assets 12,03,000 8,21,000
Machinery (2,00,000) (1,01,000)
(-)Accumulated Depreciation
10,03,000 7,20,000
6.Intangible Assets 20,000 30,000
Goodwill
7.Inventories 1,07,000 45,000
Stock-in-trade
Additional Information
a. 12% debentures were redeemed on 31st March,2015.
b. Tax Rs.70,000 was paid during the year.
Prepare a cash flow statement.

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