Chapter

5 Fund Flow Statement

THEORETICAL PROBLEMS
2016 SEP.[5](a) With examples show how to calculate Funds from
Operations (Marks 7)
2017 NOV.[1](i) Depreciation as a resource of fund (Marks 5)
(1](ii) Proposed Dividend
(Marks 5)
1 iv) Significance of fund flow statement
(Marks 5)

NGMERICAL PROBLEMS
2010APR.19] Balance Sheets of Kaku and Tonu as on 1-1-2005
and 31-12-2005 were as follows:
Balance Sheet
Liabilities 1-1-05 31-12-05 Assets 1-1-05 31-12-05
(Rs.) (Rs.) (Rs.) (Rs.)
Creditors 1,00,000 1,10,000 Cash 25,000 17,500
Mrs. Kaku's loan 62,500 - Debtors
75,000 1,25,000
Loan from SBI 1,00,000 1,25,000 Stock 87,500 62,500
Capital 3,12,500 3,82,500 Machinery 2,00,000 1,37,500
Land 1,00,000 1,25,000
Building 87,500 1,50,000

5,75,000 6,17,500 5,75,000 6,17,500

ssooeoneose

During the year a machine costing Rs. 25,000 (accumulated

depreciation Rs. 7,500) was sold for Rs. 12,500. The provision for
depreciation against machinery as on 1-1-2005 was Rs. 62,500
and on 31-12-2005 Rs. 1,00,000. Net profit for the year amounted
to Rs. 1,12,500. You are required to prepare Funds Flow State-
ment. (Marks 15)
Ans. [ Net increase in working capital Rs. 7,500, Funds from op-
eration Rs. 1,62,500; Total sources of funds Rs. 2,00,000;
Total Application of funds Rs. 1,92,500 ]
Hin
int.[ Depreciation provided during the year Hs. 45,000]

49
 th'Pu
DPT PU-5 ManagementAccountina
ations from the DPT PU-5
JNowing
M a n a g e m e n tA c c o u n t i n g operations
from
funds Additional information
Calculate Dividend of Rs. 11,500 was paid,
2010SEP/4] Income Statement
Assets of another company were
Income Statement.
purchased for a consid-
Rs.
Gross Profit Rs ration. 30,000 payable in shares. The
of Rs.
following assets were
25,000 By
in Sale
5,00,000 rchased:Stock Rs. 10,000 Machinery Rs. 12,500.
To Rent Paid
1,00,000 By Profit
To Salaries Paid of Vehicle tit) Machinery was turther purchased for Rs. 4,000.
To Provision for
3,000 fi Depreciation
written off machinery Rs.
6,000.
50,000 By Refund of Tax 2,000 (v)Income tax provided during the year Rs. 16,500.
Depreciation
5,000 By Dividend Received 10 (vi) Loss on sale of machine Rs. 100 was written off to Gen-
To Commission paid
To Provision for eral Reserve.
1,50,000
Taxation You are required to prepare schedule for changes in working
To General Reserve 3,000 and Fund Flow Statement.
capital (Marks 15)
To Loss on Sale
of Ans. [ Net decrease in working capital Rs. 9,300; Funds from op-
Investments
10,000 eration Rs. 44,300; Total sources of funds Rs. 55,200; Total
To Expenses on Application of funds Rs. 64,500 1
issue of shares
Written off 2,000 2011APR[10] Following are the summarised balance sheets of
To Provision for AB Ltd. as on 31st March, 2007 and 2008
Legal Damages 5,000
Liabilities 2007 2008 Assets 2007 2008
To Net Profit 1,65,000
Rs. Rs. Rs. RS
5,15,000 5,15,000 Share Capital 100000 130000 Land & Building 100000 95000
General Reserve 25000 30000 Machinery 75000 84500
Ans. [ Rs. 3,70.000 (Marks 5) Profit&Loss A/c 15200 15400 Stock 50000 37000
Bank Loan Cash 200 300
10 Following are the summarised balance sheets of AB Ltd.as (long-term) 35000 Bank 4000
on 31st March 2007 and
2008. Sundry Creditors 75000 67500 Sundry Debtors 40000 32100
Liabilities 2007 2008 Assets 2007 2008 Provision for tax 15000 17500 Goodwill 7500
Share Capital
Rs Rs. Rs Rs.
265200 260400
1,00,000 265200 260400
General Reserve 25.000 1,30,000 Land and ---- ---.
30,000 Building 1,00,000 95,000
Profit and
84,500
Additional Information
Loss Alc
15,200 Machinery
15,400 Stock
75,000
50,000 37,000 (0) Dividend of Rs. 11,500 was paid.
Bank Loan were purchased for a consid-
Assets of another company
(Long-term) 35,000 Sundry 32,100 raton of Rs. 30,000 payable in shares. The following assets were
Sundry Creditors 75,000
Debtors 40,000 purchased; stock Rs. 10,000, machinery Rs. 12,500.
Provision for 67,500 Cash 200
300
Rs. 4,000.
Machinery was further purchased for
Taxation Bank 4,000
Depreciation written-off machinery Hs. 6,000.
15,000 17,500 Goodwill 7,500
Income tax provided during the year Rs. 16,500.
2.65,200 2,60400 sale of machine of Rs. 100 was written offto Gen-
eralLoss
2,65,200 2.60,400 on
- - - - - - - - -

***
Reserve.
50 51
 Management, Accounting
DPT-PU-5
Balance Sheet as on 31st December
Management Accounting DPT-PU-5 for the previous year and the current year.
statement of funds flow
to prepare a Previous Current Assets
You are required Previous Current
decrease in working
capital Rs. 9,300; Funds from. L i a b i l i t i e s
Year Year
Ans. [ Net of funds Rs. 55,200: T Year Year
eration Rs. 44,300;
Total source
(Rs.) (Ps.) (Rs) (Ps)
application of funds Rs. 64,500] (Marks 15) Capital Stock 35000 43500 Patents and Trade
is taken as
non-current ] 15000 19500 Marks 1000 900
Hint.[ Prov. for tax
Retained Earnings
Bonds Payable Accumulated
are the Balance
Sheets of Y Ltd. a (2000) (1800) Depreciation (5000) (2800)
2011 SEP[10] The foliowing Discount
22000 22000 Plant& Equipment 15000 17000
and Dec. 2009.
on 31st Dec. 2008 2008
Bond Payable
2008 2009 Assets 2009 Current Liabilities 30000 32000 Business Premises 20000 16000
Liabilities
Rs Rs. Rs Rs. Land 4000 4000
2.30,000 2,30,000 Machinery 52,000 70,000 Inventories 15000 15000
Share Capital 60,000 Land &
60,000 Accounts
Reserves
Profit/Loss A/c 16,000 23,000 Building 1,50,000 1,50,000 Receivable 10000 20700
70,000 Temporary Cash and Bank 40000 44400
8% Debentures 90,000
Depreciation Fund 40,000 44,000 Investment 1,10,000 74,000
100000 115200
96,000 S. Debtors 67,000 43,000 Total Liabilities 100000 115200 Total Assets
S.Creditors 1,03,000
Outstanding Exps. 13,000 12,000 Stock 82,000 1,06,000
Prepaid Exps. 1,000 2,000 Additional Information
is Rs. 10,000.
Cash & Bank 90,000 90,000 i)Income for the period which had a book value
costs Rs. 4,000 and
5,52,000 5,35,000
it) A building that
for Rs. 1,400.
5,52,000 5,35,000 of Rs. 1,000 was sold 800.
-
for the period was Rs.
Additional information ii) The depreciation charge issue of capital stock.
paid in cash. iv) There was a Rs. 5,000
and bonus share of
Rs. 3,500
()10 %dividend was
but old v) Cash dividends of
Rs. 2,000
i) New machinery for Rs. 30,000 was purchased ma (Marks 15)
Rs. 4,000, accumulated were declared. 10,700;
chinery costing Rs. 12,000 was sold for Rs. 13,100; FFO Rs.
depreciation was Rs. 6,000. Ans. i Net increase in working capital application of funds
Rs. 17,100; Total
(ii) Rs. 20,000, 8% Debentures were redeemed by purchase Total s o u r c e of funds
Rs. 4,0000]
from open market 96 for a debenture of Rs. 100. and
(iv) Rs. 36,000 Investment was sold at book value. as on 31st March, 2009
You are required to prepare a schedule of Changes in WorkK Sheet of P Ltd.
Z012 SEP[9] Balance
ing Capital and statement showing Sources and Application o 2010 are as follows
Rs. Rs.
Funds (Marks 15) Rs.
Rs. Assets
Liabilitiess Land & Building
100000 100000
Ans. [ Net decrease in working capital Rs. 27,000; FFO Rs.
Total source of funds Rs. 45,000, Total application of funds
41,200 Share Capital 180000 180000
Plant &
Reserve for 72000 80000
60000 50000 Machinery
Rs. 72,2000
Contingencies
Profit & Loss A/c 16000 23000 Short
-term
110000 84000
90000 70000 Investments
2012 APRI10) Prepare a fund flow statement of corporation O 5% Debentures
40000 44000 Stock
92000 106000
the following inforrmation Depreciation Fund
53
52
 Management Accounting
Management Accounting DPT-PU-5 During the current year ended 31st
DPT-PU-5
103000 96000 Debtors 77000 73000
Creditors
Prepaid Expenses 1000 6 000 was paid and the assets of December,
another
a dividend of
Outstanding 2000 irchased for Rs. 50,000 payable in fully paid up company
were
13000 22000 Cash & Bank 50000
40000 shares.
Expenses ---
Such assets purchased were
502000 485000 502000 485000 Ctock Rs. 21,640; Machinery Rs.
---**. 18,360; and Goodwill Rs.
s0 000. In addition, plant at a cost of Rs.
10,000.
5,650
Additional Informations was purchased
cash. ring
durir the year. The following depreciation was written off
during
() 10% dividend was paid in
(i) New machinery for As. 20,000 was purchased but old ma:
the year
chinery costing Rs. 12,000 was sold for
Rs. 4,000, accumulatet On property, Rs. 4,250 and on
machinery Rs. 10,760.
Income tax during the year amounting to Rs. 28,770 was
depreciation was Rs. 6,000. charged to provision for taxation. Net profit for the year before tax
) 59% Debentures amounting to Rs. 20,000 were redeemed
by purchase from open market Rs. 96 for debenture of Rs. was Rs. 66,300.
statement of
100 Prepare changes in financial
position on total funds
basis. Also prepare a schedule of changes in working capital.
(iv) Rs. 10.000 debited to Contingency Reserve for settlement
of previous tax liability. Ans. Net increase in working capital Rs. 52,530; FFO Rs. 81,310;
(v) As. 26,000 investments were sold at book value. Total source of funds Rs. 1,02,950; Total application of funds
You are required to prepare a Schedule of changes in Work Rs. 50,420 ] (Marks 15)
ing capital and Funds Flow Statement. (Marks 15) S
Ans. [ Net decrease in working capital Rs. 27,000; Funds from 2013SEP 10] Following are 2011
the summarized balance sheets of
and 2012
operation Rs. 36,200; Total source of funds Rs. 40,200; XY Ltd. as on December 31,
Total application of funds Rs. 67,200 ] Liabilities 2011 2012 Assets 2011 2012
(Rs.) (Rs.) (Rs.) (Rs.)
2013 APR.[10] The foliowing are the balance sheets of AB Ltd. as Share Capital 100000 130000 Land& Building 100000 95000
on 31st December, 75000 84500
previous year and current year: General Reserve 25000 30000 Machinery
15200 15400 Stock 50000 37000
Liabilities Previous Current Assets Previous Current Profit& Loss A/c
Bank Loan Sundry Debtors 40000 32100
year (Rs) year (Rs) year (Rs) year (Rs)
Cash 200 300
Sharehoiders Fixed Assets: (Long Term) 35000
75000 67500 Bank 4000
funds Sundry Creditors
Paid-up p
Capital Property 148500 144250
17500 Goodwill 7500
Rese ital 220000 270000 Machinery 112950 126200 Provision for taxation 15000
Reserves 30000 40000 Goodwill
-
10000 265200 260400
Profit&Lossa/c 39690 41220
265200 260400
Current Liabilities
Creditors Current Assets Additional Information
Bill payable
39000 41660 Stock 110000 92000
23790 11000 Trade debtors () Dividend of Rs. 11,500 was paid consider-
Bank overdraft 86160 69430 were purchased for
60000 Cash and () Assets of another company
Provision for the following assets were
taxation 40000
Bank 1500 11000 uon of Rs. 30,000 payable in shares, Rs. 12,500.
-------
50000 Pre-payments 3370 1000 Purchased. Stock Rs. 10,000, Machinery
for Rs. 4,000.
462480 was further purchased
453880 ) Machinery
*****---
462480
*-**----

453880
-- ------ Depreciation written off on Machinery Rs. 6,000.
16,500.
i n c o m e tax provided during the year Rs.
54
55
 Management Accounting
DPT PUJ-5 DPT-PU-5
Management Accounting
machine Rs.
100 was written off to Gon
Gen- lO
d machinery
(d)
worth Rs. 8,000 has been sold for Rs. 6,500
on sale of during the year
(vi) Loss
eral Reserve. Statement of Funds Flow
Rs. 1,25,000 have been transferred to the General Reserve
Rs
to prepare
a
Funds from.
(e)
You are required capital Rs. 9,300; Fund.
decrease in working
of funds Rs. 55,200; Tota8 Depreciation has been provided
(1) and furniture at 20% whose totalduring
Ans. [ Net source the vear on machinery
eration Rs.
44,300; Total
64,500 (Marks 15) cost is Rs. 6,50,000.
application of funds Rs.
taken as non-current ] Ans. [ Rs. 8,89,000 ] (Marks 5)
Hint.[Prov. fortax is
balance sheets of D Companu From the
comparative 015 SEPI1](d) following details, finds out funds from
2014SEP5) The changes in balance sheets, items for 2012
following
showed the operations
to 2013 Particulars Rs. Particulars Rs.
Rs 40,000 By Gross Profit 1,00,000
1,27,500 increase To Salaries
Working Capital To Rent 15,000 By Profit on sale of
Long term investments 45,000 increase
48,000 increase To Provision for Bad Building
Land debts 5,000 Sold for Rs. 10.000
90,000 increase
Machinery (less accumulated depreciation) To Preliminary Expenses Book Value Rs 5.000 5,000
15% Debentures 2,40,000 increase
60,000 increase written off 10,000
Share Capital 5,000
10,500 increase To Goodwll written off
Reserves and Surpluses
To Depreciation on
The following additional data is provided 5,000
Machinery
(a) Net profit for the year was Rs. 1,57,500. To Loss on sale of Plant
(b) Accumulated depreciation for 2012 was Rs. 67,500 and Book value Rs. 10,000
for 2013 Rs. 90,000. Sold for Rs. 8.000 2,000
(c) A machine of Rs. 1,12,500 was purchased during the year; To Provision for Tax 5,000
depreciation expense for the year was Rs. 22,500. To Net Profit 18,000
(d) A stock dividend of Rs. 60,000 was distributed during the
year. 1,05,000 1,05,000
(e) A cash dividend of Rs. 87,000 was declared and paid dur- (Marks 5
ng te year. Prepare a statement of changes in financial position Ans.[ Rs. 40,0001
for D company. (Marks 15) Enterprises as on 31st
Ans. Funds from operations Rs. 1,80,000; Source of funds HS. 2016APR.TOf Balance Sheet of Sheetal
4,20.000; Application of funds Rs. 2,92,500 March, 2013 and 2014 are as follows
31-3-2013 31-3-2014
Liabilities 31-3-2013 31-3-2014 Assets
2015 APR.5] Calculate 'Funds From (Rs.) (Rs.) (As.)
mation given Operations' from the intor (Rs.)
15,00,000 14.00,000
below as on 31st March 2014 Share Capital 20,00,000 20,00,000 Land & Building
(a) Net Profit for the year ended 4,50,000 Plant& Machinery
18.00,000 17,50,000
31st March 2014, Rs. 6,50,000 General Reserve 4,00,000
(b) Gain on sale of 4,00.000 3.72.000
(c) Goodwill
buiding Rs. 35,500. P&L AC 2.50,000
3,60,000 Investment
8.50,000
appears in the 4,80,000
books at Rs. 1,80,000 out of 10% Debenture 8,00,000 Stock
10% has been writtern
off during the wni 10,00,000
year.
56 57
 Management Accounling
Management Accounting DPT PU-5 Balance Sheet DPT-PU-5
Bank Loan Debtors 6,00,000 7.98,000 (as on March 31,
(Long Term) 5,00,000 6,00,000 Prepaid Exps. 50,000
40,000 2015)
5,80,000 Cash and Bank 1,40,000
Creditors 4,00.000 85,000 Amount (in Rs.)
Outstanding FY 2015 FY 2014
25,000 Equity Capital
Expenses 20.000 15,75,000
Proposed Dividend 3,00,000 3,60,000
General Reserves 13,50,000
Capital Reserves 5,62,500 4,50,000
Provision for 22,500
1,00,000 1,20,000 Profit and Loss Account
Taxation 4,50,000 2,25,000
-****
12% Debentures
49,70,000 52,95,000 49,70,000 52,95,000 4,50,000 6,75,000
---- Sundry Creditors
5,62,000
- - - - - - - - - -
3,60,000
Additional Information Outstanding Expenses 27,500 22,500
) New machinery for Rs. 3,00,000 was purchased but an old Proposed Dividend 76,500 67,500
Provision for Taxation
machinery costing Rs. 1,45,000 was sold for Rs. 50,000 and 1,71,000 1,57,500
accumulated depreciation thereon was Rs. 75,000.
() 10% debentures were redeemed at 20% premium.
Total 38,97,000 33,07,500
(ii) Investments were sold for Rs. 45,000 and its profit was trans-
ferred to general reserve. Assets
iv) Income tax paid during the year 2013-14 was Rs. 80,000. Fixed Assets 27,00,000 22,50,0000
(v) An interim dividernd of Rs. 1,20,000 has been Less Accumulated
paid during the
year 2011-12. Depreciation 5,62,500 4,50,000
(vi) Assume the provision for taxation as current liability and Net Fixed Assets 21,37,500 18,00,000
pro-
posed dividend as non-current liability. Long Term Investments (at Cost) 4,05,000 4,05,000
(vii) Investments are non-trade investments.
Inventories 6.07,500 4,50,000
You are required to Book Debts (Net of Provisions) 5,51,250 5,06,250
prepare
() Schedule of Bills Receivables 1,46,250 90,000
Changes in Working Capital
(i) Finds Flow Statement. Prepaid Expenses 27,000 22,500
Ans. (Marks 15)
[ ) Net increase in working
from Operation Rs.
capital Rs. 2,98,000 (i) Funds Cash and Bank Balances 22,500 33,750
10,63,000; Total source of funds Rs. -
12.58,000; Total application of funds Rs. Total 38,97,000 33,07,500
Hint. [ Depreciation 9,60,000 ]
on- P&M Rs.2,80,000; L&B Rs. 1,00,000;
Debenture interest is ignored ] Additional Informations
Rs. 90,000 for FY 2014 and
Frovision for Doubtful Debts were
2016 NOV.[13) From the following Balance Sheet of X Ltd.
Rs. 1,12,500 for FY 2015.
pare Fund
Flow Statement pre During FY 2015, fixed assets with a net book value of Rs. 22,500
were sold for Rs.
taccumulated depreciation Rs. 67,500)
18,000.
redeemed at a premium of 10%.
Debentures were
58
59
 ManagementAccounting
DPT PU-55
Management Accounting DPT-PU-5 MO statement of Sources and Applications of Funds of the
(iv) Tax of Rs. 1,28,000 was paid for FY 2014 P r e p a r e
1st
year ended 31s December, 2007 and a schedule of changes in
(v) Proposed Dividend for FY 2014 was paid during FY 2015, working c a p i t a l .
(Marks 15)
(vi) During FY 2015 Bad Debts of Rs. 31,500 were wntten off against
wo let increase in working capital Rs. 3,840; Funds from op-
provision for Doubtful Debts. (Marks 15) Ans.
erations Rs. 8,320; Total source of funds Rs. 12,620; Total
Ans. [ Net increase in working capital Rs. 45,000; Funds from Rs. 8,780
operation Rs. 7,62,500; Total source of funds Rs. 10,28,000 application of funds
Total application of funds Rs. 9,83,000] t ) Provision for taxation is treated as current (i) Total de-
Hint. [ ) Proposed dividend and provision for taxation treated as preciation on machinery sold Rs. 765 (ii) Fixed assets
non-current (i) Creation of capital reserve Rs. 22,500 purchased during the year Rs. 4,900
treated as share premium received on issue of equity capi are the summaries of Balance Sheets of
018 NOV.[14] Following
tal of Rs. 2,25,000 as on 31s" December, 2010 and 2011
ALimited Company
2010 Rs. 2011 Rs.
2017 NOV.[8] The condensed Balance Sheets of Hindustan Book
Paid up Share Capital 1,00,000 1,00,000
Ltd., are given below 26,000
General Reserve 21,400
Liabilities 2007 2006 Assets 2007 2006 17,000 16,000
Profit and Loss A/c
(Rs.) (Rs.) (Rs.) (Rs.) Creditors 9,750 6,380
Share Capital 40,000 36,000 Fixed Assets 52,000 48,000 Provision for taxation
General Reserves 6,000 11,000 Less Depreciation. 14.000 10.800 19,000 21,000
38,000 37,200 (Non-Current)
Profit&Loss A/c 3,345 2,045 1,000 1,200
Investments at cost 5,000 10,000 Provision for doubtful debts
Sundry Creditors 19,535 13,365
Proposed Dividend 1,500 2,880 Stocks 9,050 5,560 1,68,150 1,70,580
Cash and Bank 4,750 4,980 Total
(N.C)
Provision for Taxation 3,200 5,000 Sundry Debtors 16,780 11,830
Preliminary Exp. 720 46,800 45,000
Buildings 42,030
38,280
73,580 70,290 73,580 70,290 Machinery 13,000
Goodwill 13,000
10,000 11,250
Investments
(i) The Net Profit of the year, after provision for taxation Rs. 3,200, 30,000 28,000
Stock
writing off preliminary expenses Rs. 720 and providing for de- 22,000 22,000
preciation Rs. 3,965, amounted to Rs. 3,800. Debtors 300
70
(i) A machine purchased for Rs. 900 on 1st Jan., 1999 was sold Prepaid Expenses 9,000
for cash Rs. 300 on 1st July, 2007. Depreciation is provided Cash Balance 8,000
on this machinery at 10% per annum on cost.
Total
1,68,150 1,70,580
(ii) A portion of company's investment has become worthless and
was written off to General Reserves. The cost of such invest Additional Information been
ment was Rs. 5,000. Rs. 8,600 which has
a) The profit for the year 2011
was
(iv) During the year company paid an interim dividend of Rs. 1,000 of depreciation and
charging Rs. 3,050 by way 200.
arrived at after
and Directors have recommended a final dividend of Rs. 1,500 debts Rs.
for the year 2007.
increasein provision for doubtful was paid in
October 2011.
(0) An interim dividend of Rs. 5,000
was purchase
in May, 2011 for Rs. 5,000.
) Additional machinery
60 61
 Management Accounting DPT PU-5 Managemen Accounting
(d) Investments (Cost Rs. 5,000) were sold in Nov. 2011 for DPT-PU-5
o.000
of Rs. 30,.d payable in shares. The
4,800 and on 1st December, 2011 another investment Rs
D.
chased:
purchased Stock Rs. following assets were
was Stock 10,000;
Machinery Rs.
purchased for Rs. 4,000. 12,500.
made for Rs. 6,250.
-
Machinery was t further
(e) Income-tax Rs. 18,000 was paid during the year and written off on
charged (d) Depreciation
machinery Rs. 6,000.
against the provision. rged come Tax provide during the year Rs. 16,500.
Prepare a statement showing Sources and Applications of
(t) Loss on sale of machinery Rs. 100 was written off
during the year 2011. nds to General
Reserve.
Ans. [ Net increase in working capital Rs. 2,400; Funds(Marks 15)
from on a e required to
prepare a Fund Flow
eration Rs. 31,850; Total source of funds Rs.
36,650; Total To Net decrease in working capital Rs. Statement. (Marks 15)
9,300; Funds from op-
Application of funds Rs. 34,2500] eration Rs. 44,300; Total source of funds Rs. 55,200; Total
Hint. [ Provision for taxation made during 2011 Rs. 20,000 application of funds Rs. 64,5001
Hint. [ Prov. for tax Is taken as non-current 1
2019 NOV.[14] Following are the summarized Balance Sheets of
X Ltd. as on 31st March, 2018 and 2019:
2020NOV.[1]() Calculate 'Fund from
operations' from the infor
Liabilities 2018 mation given below as on 31st March 2013
Share Capital 2019
1,00,000 1,30,000 Net profit for the year ended 31st March 2013, Rs. 6,50,000.
General Reserve 25,000 () Gain on the sale of building Rs. 35,500.
Profit& Loss A/C 30,000
15,200 15,400 () Goodwill appears in the books at Rs. 1,80,000 out of that 10
Bank Loan (Long Term)
Sundry Creditors
35,000 percent has been written during the year.
75,000 67,500 (w) Old machinery worth Rs. 8,000 has been sold for Rs. 6,500
Provision for tax 15,000 17,500 during the year.
(v) Rs. 1,25,000 have been transferred to the General Reserve
Total 2,65,2000 2,60,4000 Fund.
(vi) Depreciation has been provided during the year on machinery
Assets 2018 and furniture at 20% whose total cost is Rs. 6,50,000.
2019
Land& Buildings 1,00,000 Ans.[ As. 8,89,000 ] (Marks 5)
95,000
Machinery 75,000 84,500
Stock 9 From the following Condensed Balance Sheets of A Ltd. for the
50,000 37,000
Sundry Debtors 40,000 year ending 31st March, 2010 and 31st March 2011, draw out a
32,100
Cash 200 300
Funds Flow Statement and a Statement of Changes in Working
Bank Capital for 2011.
4,000
Goodwill Balance Sheets of A Ltd.
7,500
Liabilities 31st Mar 31st Mar Assets 31st Mar 31st Mar
Total 2,65,200 2010 2011
2,60,400 2010 2011
Rs. Rs. Rs. Rs.
Other Information Equity Share Capital 3.00,000 4,00,000 Goodwill 60,000 55.000
6% Redeemable Prefe Land&Building 1,25,000 85,000
(a) Dividend of Rs. 11.500 was paid.
(b) Assets of another company were
rence Share Capital 80,000 50,000 Plant& Machinery 1,20,000 2,25,000
purchased for consideration Capital Reserve 20,000 Furniture 15,000 12,000
62 63
 DPT-PUJ-5
Management Accounting
Management Accounting DPT PU-5
General Reserve 30,000
40,000 Trade Investments 12,000 48 000 31st Decem-
are the balance sheets of Y Ltd, as on
Profit&Loss Ac 26,000
35,000 Sundry Debtors 65,000 1,05,000 141 Following
58,000 Stocks 90,000 and 2019:
16,000 84,000
Sundry Creditors 30,000 er,
2018
12,000
8,000 Bills Receivable
30 000 2018 2019 Assets 2018 2019
Bill Payable 13,000 Rs.
5,000 Cash in Hand Liabilities Rs.
15,000 20,000
Outstanding Expenses 6,000 Rs Rs
42,000 Cash at Bank 52,000 70,000
36,000 Preliminary Expenses 15,000 20,000
Proposed Dividend 30,000 Share Capital 2,30,000 2,30,000 Machinery
10 000 1,50,000 1,50,000
Provision for Taxation 32,000
General Reserve 60,000 60,000 Land &Building
***** a/c 16,000 23,000 Temporary
5,46,000 6,94,000 5,46,000 6,94,000
-- *-**** *****--..
Profit &
8% Debentures

Loss
90,000 70,000 Investment 1,10,000 74,000
---- - ---*
44,000 Sundry Debtors 67,000 43,000
Depreciation Fund 40,000
1,03,000 96,000 Stock 82,000 1,06,000
Sundry Creditors
Additional Information 13,000 12,000 Prepaid Expenses 1,000 2,000
sold out in the year ended 2011 and Outstanding Exps.
(a) A piece of land has been Cash&Bank 90,000 90,000
on sale and revalua
the balance has been revalued, profits **
tion transferred to Capital Reserve Account.
being 5,52,000 5,35,000 Total 5,52,000 5,35,000
has been written off Rs Total
(b) Depreciation on Plant and Machinery been
-*
24,000 in 2011 and no depreciation
has charged on land
Additional information
and buildings. paid in cash.
Rs. 20,000) 10% Dividend was
(c) A Machinery was sold for Rs. 16,000 (w.d.v being i.
was purchased but old ma-
and no furmiture has been sold during the year. . New machinery for Rs. 30,000
been paid in 2011 chinery costing Rs. 12,000
was sold for Rs. 4,000, accumulat
(d) An interim dividend of Rs. 20,000 has
Dividend on Trade Invest ed depreciation was Rs. 6,000.
(e) Rs. 3,000 has been received as Debentures were redeemed by purchase from
ments (Marks 15) ii. Rs. 20,000, 8%
for a debenture of Rs. 100.
Ans. [ Net increase in working capital Rs. 21,000; Funds from open market @96
value.
Rs. 36,000 Investment was sold at book
operation Rs. 77,000; Total Source of Funds Rs. 2,56,000: iv.
in Work-
Total Application of Funds Rs. 2,35,000] You are required to prepare a schedule of Changes
Hint. Provision for Taxation and Proposed Dividend are treated Sources and Application of
[ ing Capital and statement showing
as Current Liabilities Funds. (Marks 15)
FFO Rs. 41,200;
a24 Ans. [ Net decrease in working capital Rs. 27,000;
2021 NOV.I5] Calulate 'Funds From Operations' from the infor-
Total source of funds Rs. 45,000; Total application of funds
mation given below as on 31st March 2014 Rs. 72,200]
(a) Net Profit for the year ended 31 March 2014, Rs. 6,50,000
(b) Gain on sale of building Rs. 35,500
(c) Goodwill appears in the books at Rs. 1,80,000 out of which
10% has been written off during the year
(d) Old machinery worth Rs. 8,000 has been sold for Rs.. 6,500
during the year
(e) Rs. 1,25,000 have been transferred to the General Reserve
Fund
() Depreciation has been provided during the year on machinery
and furniture at 20% whose total cost is Rs. 6,50,000.
Ans.[ Rs. 8,89,000 ] (Marks 5)
64 65