Chapter-6 Cash Flow Statement

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  • Chapter-6 Cash Flow Statement Assignments 1

     

    Following is the Financial Statement of Garima Ltd. Prepare Cash flow Statements.

     

    Balance Sheet as on 31st Dec. 2006

     

    Liabilities

    2005

    Rs

    2006

    Rs

    Assets

    2005

    Rs

    2006

    Rs

    Equity Share Capital

    2,00,000

    3,00,000

    Plant and Machinery

    2,00,000

    3,64,000

    Preference Share Capital

    80,000

    1,40,000

    Stock

    60,000

    1,60,000

    Creditors

    56,000

    1,56,000

    Debtors

    20,000

    80,000

    Provision for Taxation

    4,000

    12,000

    Bank

    80,000

    28,000

    Profit & Loss Account

    28,000

    40,000

    Prepaid Expenses

    8,000

    16,000

     

    3,68,000

    6,48,000

     

    3,68,000

    6,48,000

     

     

     

     

     

     

     

    Profit and Loss Account for the Year ended Dec. 31, 2006

     

    Receipts

    Amount

    Rs

    Payments

    Amount

    Rs

    Opening Stock

    60,000

    Sales

    5,00,000

    Purchase

    4,92,000

    Closing Stock

    1,60,000

    Gross Profit c/d

    1,08,000

     

     

     

    6,60,000

     

    6,60,000

    Salary

    44,000

    Gross Profit b/d

    1,08,000

    Depreciation

    32,000

     

     

    Provision for Tax

    16,000

     

     

    Net Profit c/d

    16,000

     

     

     

    1,08,000

     

    1,08,000

    Dividend

    4,000

    Balance b/d

    28,000

    Balance c/d

    40,000

    Net Profit b/d

    16,000

     

    44,000

     

    44,000

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  • Chapter-6 Cash Flow Statement Assignments 2

      

    From the following Information Prepare Cash flow Statements for Yogeta Ltd.

     

    Balance Sheet

     

    Liabilities

    2005

    Rs

    2006

    Rs

    Assets

    2005

    Rs

    2006

    Rs

    Equity Share Capital

    2,00,000

    3,00,000

    Bank

    45,000

    -

    Preference Share Capital

    -

    1,00,000

    Cash

    5,000

    -

    Profit and Loss Account

    1,00,000

    2,00,000

    Stock

    1,00,000

    1,70,000

    Loan

    2,00,000

    -

    Bills Receivable

    50,000

    1,00,000

    Provision for Taxation

    30,000

    50,000

    Fixed Assets

    4,00,000

    7,00,000

    Bills Payable

    50,000

    70,000

     

     

     

    Bank overdraft

    -

    1,00,000

     

     

     

    Loan from Rahul

    20,000

    1,50,000

     

     

     

     

    6,00,000

    9,70,000

     

    6,00,000

    9,70,000

     

     

     

     

     

     

     

    Additional Information:

    Net Profit for the year After Charging Rs 50,000 as Depreciation was Rs 1,50,000. Dividend paid on Share was Rs 50,000, Tax Provision created during the year year amounted to Rs 60,000.

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  • Chapter-6 Cash Flow Statement Assignments 3

      

    Prepare Cash Flow Statement from the following Information:

     

    Balance Sheet

    Liabilities

    2004

    Rs

    2005

    Rs

    Assets

    2004

    Rs

    2005

    Rs

    Equity Share Capital

    5,00,000

    7,00,000

    Cash/Bank

    3,00,000

    4,00,000

    8% Debentures

    6,00,000

    4,00,000

    Sundry Debtors

    4,00,000

    6,00,000

    Profit and Loss Account

    3,00,000

    5,00,000

    Stock

    5,00,000

    6,00,000

    Creditors

    6,00,000

    9,00,000

    Goodwill

    2,50,000

    1,70,000

     

     

     

    Discount on Debenture

    50,000

    30,000

     

     

     

    Plant

    5,00,000

    7,00,000

     

    20,00,000

    25,00,000

     

    20,00,000

    25,00,000

     

     

     

     

     

     

     

    Additional Information:

    Depreciation Charge on Plant amount to Rs 80,000.

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  • Chapter-6 Cash Flow Statement Assignments 4

    :  

    From the following Balance Sheets of Tiger Super Steel Ltd., prepare Cash Flow Statement:

    Balance Sheet

    Liabilities

    2005

    Rs

    2006

    Rs

    Assets

    2005

    Rs

    2006

    Rs

    Equity Share Capital

    80,000

    1,20,000

    Goodwill

    24,000

    18,800

    10%Preference Sh. Capital

    40,000

    20,000

    Land and Building

    40,000

    20,000

    General Reserve

    8,000

    12,000

    Plant

    36,000

    76,400

    Profit and Loss Account

    7,200

    10,800

    Investment

    4,000

    14,000

    Proposed Dividend

    11,200

    15,600

    Debtor's

    30,000

    43,200

    Bills Payable

    14,000

    21,200

    Stock

    34,000

    31,200

    Outstanding Expenses

    3,200

    2,400

    Cash

    6,800

    11,200

    Provision for Taxation

    11,200

    12,800

     

     

     

     

    1,74,800

    2,14,800

     

    1,74,800

    2,14,800

     

     

     

     

     

     

     

    Additional Information:

    Depreciation Charge on Land & Building Rs 20,000, and Plant Rs 10,000 during the year.

     

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  • Chapter-6 Cash Flow Statement Assignments 5

     

    From the following Balance Sheet of Mohan Ltd. Prepare cash flow Statement:

    Balance Sheet of Rajeshwar Limited as on ............................

    Liabilities

    2005

    Rs

    2006

    Rs

    Assets

    2005

    Rs

    2006

    Rs

    Equity Share Capital

    2,00,000

    3,00,000

    Fixed Assets

    4,00,000

    6,00,000

    Profit and Loss

    1,60,000

    2,00,000

    Stock

    1,30,000

    1,50,000

    Bank Loan

    1,00,000

    80,000

    Debtor's

    1,00,000

    60,000

    Accumulated Dep.

    80,000

    1,00,000

    Bills Receivable

    20,000

    30,000

    Creditor

    1,40,000

    1,20,000

    Bank

    90,000

    30,000

    Proposed Dividend

    60,000

    70,000

     

     

     

     

    7,40,000

    8,70,000

     

    7,40,000

    8,70,000

     

     

     

     

     

     

    Additional Information:

    Machine Costing Rs 80,000 on which accumulated depreciation was Rs, 50,000 was sold for Rs 20,000.

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  • Chapter-6 Cash Flow Statement Assignments 6

     

    From the following Particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also show the workings clearly preparing the ledger accounts:

     

    Balance Sheet of Bharat Gas Limited as on .....................

     

    Liabilities

    2006

    Amount

    Rs

    2007

    Amount

    Rs

     

    2006

    Amount

    Rs

    2007

    Amount

    Rs

     

     

     

    Goodwill

    1,00,000

    3,00,000

     

     

     

    Patents

    2,80,000

    1,60,000

     

     

     

    Machinery

    10,20,000

    12,40,000

     

     

     

    10% Long-term Investment

    60,000

    1,60,000

     

     

     

    Investment in Land

    1,00,000

    1,00,000

     

     

     

    Shares of Amartax Ltd.

    1,00,000

    1,00,000

     

     

     

     

     

     

     

    Additional Information:

    (a) Patents were written off to the extent of Rs 40,000 and some Patents were sold at a profit of Rs 20,000.

    (b) A Machine costing Rs 1,40,000 (Depreciation provided thereon Rs 60,000) was sold for Rs 50,000. Depreciation charged during the year was Rs 1,40,000.

    (c) On March 31, 2007, 10% Investments were purchased for Rs 1,80,000 and some Investments were sold at a profit of Rs 20,000. Interest on Investment was received on March 31, 2007.

    (d) Amartax Ltd. paid Dividend @ 10% on its shares.

    (e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs 30,000.

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  • Chapter-6 Cash Flow Statement Assignments 7

     

    Compute cash from operations from the following figures:

    (i) Profit for the year 2005-06 is a sum of Rs 10,000 after providing for depreciation of Rs 2,000.

    (ii) The current assets of the business for the year ended March 31, 2006 and 2007 are as follows:

     

     

    March

    March

     

    31, 2006

    31, 2007

     

    Rs

    Rs

    Debtors

    10,000

    12,000

    Provision for Doubtful Debts

    1,000

    1,200

    Bills Receivables

    4,000

    3,000

    Bills Payables

    5,000

    6,000

    Creditors

    8,000

    9,000

    Inventories

    5,000

    8,000

    Short-term Investments

    10,000

    12,000

    Outstanding Expenses

    1,000

    1,500

    Prepaid Expenses

    2,000

    1,000

    Accrued Income

    3,000

    4,000

    Income received in advance

    2,000

    1,000

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  • Chapter-6 Cash Flow Statement Assignments 8

    Explain the major Cash Inflows and outflows from financing activities.

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  • Chapter-6 Cash Flow Statement Assignments 9

     

    The following is the Profit and Loss Account of Yamuna Limited:

     

    Yamuna Limited

    Profit and Loss Account for the Year ended March 31, 2007

     

    Rs

    Rs

    Sales

     

    10,00,000

    Cost of Goods Sold:

     

     

    Opening Stock

    2,50,000

     

    Purchases

    5,00,000

     

     

    7,50,000

     

    Less: Closing Stock

    2,00,000

    5,50,000

    Gross Profit

     

    4,50,000

    Operating Expenses

     

    3,00,000

    Net Profit

     

    1,50,000

     

     

     

     

    Additional information:

    (i) Trade debtors decrease by Rs 30,000 during the year.

    (ii) Prepaid expenses increase by Rs 5,000 during the year.

    (iii) Trade creditors decrease by Rs 15,000 during the year.

    (iv) Outstanding expenses increased by Rs 3,000 during the year.

    (v) Operating expenses included depreciation of Rs 25,000. Compute net cash provided by operations for the year ended March 31, 2007 by the indirect method.

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  • Chapter-6 Cash Flow Statement Assignments 10

    Explain the major Cash Inflow and outflows from investing activities.

     

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  • Chapter-6 Cash Flow Statement Assignments 11

     

    For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow viz., operating, investing and financing.

    (a) Acquired machinery for Rs 2,50,000 paying 20% drawn and executing a bond for the balance payable.

    (b) Paid Rs 2,50,000 to acquire shares in Informa Tech. and received a dividend of Rs 50,000 after acquisition.

    (c) Sold machinery of original cost Rs 2,00,000 with an accumulated depreciation of Rs 1,60,000 for Rs 60,000.

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  • Chapter-6 Cash Flow Statement Assignments 12

    Describe 'Direct' and 'Indirect' methods of ascertaining Cash Flow from Operating Activities.

     

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  • Chapter-6 Cash Flow Statement Assignments 13

     

    From the information given below you are required to prepare the cash paid for the inventory:

     

     

    Rs

    Inventory in the beginning

    40,000

    Purchases

    1,60,000

    Inventory in the end

    38,000

    Inventory creditors in the beginning

    14,000

    Inventory creditors in the end

    14,500

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  • Chapter-6 Cash Flow Statement Assignments 14

    Describe the procedure to prepare Cash Flow Statement.

     

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  • Chapter-6 Cash Flow Statement Assignments 15


    Anand Ltd. arrived at a net income of Rs 5,00,000 for the year ended March 31, 2007. Depreciation for the year was Rs 2,00,000. There was a gain of Rs 50,000 on assets sold which was credited to profit and loss account. Bills Receivables increased during the year Rs 40,000 and Bills Payables also increased by Rs 60,000. Compute the cash flow operating activities by the indirect approach.

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  • Chapter-6 Cash Flow Statement Assignments 16

    Now that you know the meaning of operating activities, state clearly what would constitute the operating activities for the following types of enterprises:

    (i) Hotel

    (ii) Film production house

    (iii) Financial enterprise

    (iv) Media enterprise

    (v) Steel manufacturing unit

    (vi) Software business unit.

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  • Chapter-6 Cash Flow Statement Assignments 17

    Prepare a format of cash flow from operating activities under direct method and indirect method.

     

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  • Chapter-6 Cash Flow Statement Assignments 18

    Explain the terms: Cash Equivalents, Cash flows.

     

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  • Chapter-6 Cash Flow Statement Assignments 19

    What are the objectives of preparing cash flow statement?

     

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  • Chapter-6 Cash Flow Statement Assignments 20

    State the uses of cash flow statement?

     

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  • Chapter-6 Cash Flow Statement Assignments 21

    How are the various activities classified (as per AS-3 revised) while preparing cash flow statement?

     

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  • Chapter-6 Cash Flow Statement Assignments 22

    What is a Cash Flow Statement?

     

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