From the following Balance Sheet of Computer India Ltd., prepare a Cash Flow Statement (all figures ₹ in '000).
Balance Sheet of Computer India Ltd. (₹ in '000)
| Particulars | Note No. | 31 March 2017 (₹) | 31 March 2016 (₹) |
|---|---|---|---|
| I. Equity and Liabilities | |||
| 1. Shareholders' Funds — a) Share capital | 52,000 | 40,000 | |
| b) Reserve and surplus (Surplus) | 1 | 9,500 | 8,000 |
| 2. Non-current Liabilities — 10% Debentures | 6,500 | 6,000 | |
| 3. Current liabilities — a) Short-term borrowings | 2 | 6,800 | 12,500 |
| b) Trade payables | 11,000 | 12,000 | |
| c) Short-term provisions | 3 | 4,200 | 3,000 |
| Total | 90,000 | 81,500 | |
| II. Assets | |||
| 1. Non-current assets — Fixed assets | 4 | 27,000 | 30,000 |
| 2. Current assets — Inventories | 35,000 | 30,000 | |
| Trade receivables | 24,000 | 20,000 | |
| Cash and cash equivalents (cash) | 3,500 | 1,200 | |
| Other current assets (prepaid expenses) | 500 | 300 | |
| Total | 90,000 | 81,500 |
Notes to Accounts (₹ in '000)
| Particulars | 31 March 2017 (₹) | 31 March 2016 (₹) |
|---|---|---|
| 1. Reserve and surplus: Balance in Statement of Profit and Loss | 7,000 | 6,000 |
| General reserve | 2,500 | 2,000 |
| 2. Short-term borrowings: Bank overdraft | 6,800 | 12,500 |
| 3. Short-term provisions: Provision for taxation | 4,200 | 3,000 |
| 4. Fixed Assets (gross) | 42,000 | 41,000 |
| Less: Accumulated Depreciation | (15,000) | (11,000) |
| Net Fixed Assets | 27,000 | 30,000 |
Additional Information: Proposed dividend for the year 2015-16 is ₹2,50,00,000.
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Start your 14-day free trial to unlock the full solution →Cash Flow Statement of Computer India Ltd. for the year ended 31 March 2017 (all figures Rs in '000): Operating ₹(1,000); Investing ₹(1,000); Financing ₹4,300; net increase in cash ₹2,300, taking cash from ₹1,200 to ₹3,500.
Prepared under AS-3 (Revised) - Indirect Method. All figures are Rs in '000. Bank overdraft (short-term borrowing) is treated as a financing activity; the previous year's proposed dividend (₹2,500) is the dividend paid during the year.
Working Note - Net Profit before Tax
| Particulars | ₹('000) |
|---|---|
| Increase in Balance of Statement of P&L (7,000 - 6,000) | 1,000 |
| Add: Transfer to General Reserve (2,500 - 2,000) | 500 |
| Add: Dividend paid during the year (2015-16 proposed) | 2,500 |
| Add: Provision for taxation (current year) | 4,200 |
| Net Profit before Tax | 8,200 |
Fixed Assets (Note 4): accumulated depreciation rose 11,000 to 15,000, so depreciation for the year = 4,000; gross block rose 41,000 to 42,000, so purchases = 1,000 (no asset sold).
A. Cash Flow from Operating Activities
| Particulars | ₹('000) |
|---|---|
| Net Profit before Tax | 8,200 |
| Add: Depreciation | 4,000 |
| Operating Profit before Working Capital Changes | 12,200 |
| Less: Increase in Inventories (35,000 - 30,000) | (5,000) |
| Less: Increase in Trade Receivables (24,000 - 20,000) | (4,000) |
| Less: Increase in Prepaid Expenses (500 - 300) | (200) |
| Less: Decrease in Trade Payables (12,000 - 11,000) | (1,000) |
| Cash Generated from Operations | 2,000 |
| Less: Income Tax paid (opening provision) | (3,000) |
| Net Cash used in Operating Activities (A) | (1,000) |
B. Cash Flow from Investing Activities
| Particulars | ₹('000) |
|---|---|
| Purchase of Fixed Assets (gross: 42,000 - 41,000) | (1,000) |
| Net Cash used in Investing Activities (B) | (1,000) |
C. Cash Flow from Financing Activities
| Particulars | ₹('000) |
|---|---|
| Proceeds from issue of Share Capital (52,000 - 40,000) | 12,000 |
| Proceeds from issue of 10% Debentures (6,500 - 6,000) | 500 |
| Repayment of Bank Overdraft / Short-term Borrowings (12,500 - 6,800) | (5,700) |
| Dividend paid (2015-16 proposed) | (2,500) |
| Net Cash from Financing Activities (C) | 4,300 |
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