Following are the summarised Balance Sheets of B.T. Ltd. for the year ended 31st March, 2015 and 31st March, 2016:
| Liabilities | 31st March, 2015 (₹) | 31st March, 2016 (₹) | Assets | 31st March, 2015 (₹) | 31st March, 2016 (₹) |
|---|---|---|---|---|---|
| Equity Share Capital of ₹ 10 each | 10,00,000 | 13,00,000 | Plant and Machinery (at cost) | 7,00,000 | 9,30,000 |
| General Reserve | 40,000 | 40,000 | Less: Accumulated Depreciation | 2,00,000 | 2,30,000 |
| Profit and Loss A/c | 20,000 | 24,000 | 5,00,000 | 7,00,000 | |
| 12% Debentures | 1,50,000 | 1,50,000 | Investments (Long-term) | 2,00,000 | 2,80,000 |
| Sundry Creditors | 2,40,000 | 2,20,000 | Stock | 4,00,000 | 5,00,000 |
| Bills Payable | 20,000 | 36,000 | Debtors | 3,00,000 | 2,00,000 |
| Cash at Bank | 70,000 | 90,000 | |||
| 14,70,000 | 17,70,000 | 14,70,000 | 17,70,000 |
Prepare a Cash Flow Statement of B.T. Ltd. for the year ended on 31st March, 2016.
Or
- What do you mean by ‘Cash and Cash Equivalents’?
- Mention the activities under which the following transactions will appear in a Cash Flow Statement as per AS-3:
- Dividend received;
- Interest paid to debentureholders;
- Sale proceeds of fixed assets; and
- Issue of 10% Preference Shares for cash.
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Start your 14-day free trial to unlock the full solution →Cash from Operating ₹30,000; Investing (₹3,10,000); Financing ₹3,00,000. Net increase ₹20,000, matching Cash at Bank ₹70,000 → ₹90,000.
Assumptions (no extra information given): no fixed asset was sold, so depreciation for the year = increase in accumulated depreciation = 2,30,000 − 2,00,000 = ₹30,000; plant purchased (at cost) = 9,30,000 − 7,00,000 = ₹2,30,000; no interim dividend, tax provision or transfer to reserve is given, so profit for the year = increase in Profit and Loss A/c = ₹4,000.
Cash Flow Statement of B.T. Ltd. for the year ended 31st March, 2016 (Indirect Method, AS-3)
| Particulars | ₹ | ₹ |
|---|---|---|
| A. Cash Flow from Operating Activities | ||
| Net profit for the year (increase in P&L A/c) | 4,000 | |
| Add: Depreciation | 30,000 | |
| Operating profit before working capital changes | 34,000 | |
| Add: Decrease in Debtors | 1,00,000 | |
| Add: Increase in Bills Payable | 16,000 | |
| Less: Increase in Stock | (1,00,000) | |
| Less: Decrease in Creditors | (20,000) | |
| Net Cash from Operating Activities | 30,000 | |
| B. Cash Flow from Investing Activities | ||
| Purchase of Plant and Machinery | (2,30,000) | |
| Purchase of Long-term Investments | (80,000) | |
| Net Cash used in Investing Activities | (3,10,000) | |
| C. Cash Flow from Financing Activities | ||
| Proceeds from issue of Equity Share Capital | 3,00,000 | |
| Net Cash from Financing Activities | 3,00,000 | |
| Net Increase in Cash and Cash Equivalents (A+B+C) | 20,000 | |
| Add: Cash at Bank at beginning (31 Mar 2015) | 70,000 | |
| Cash at Bank at end (31 Mar 2016) | 90,000 | |
| … |
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