From the following Balance Sheet of B Ltd., prepare a Cash Flow Statement for the year ended 31st March, 2018:
| Particulars | Note No. | 31st March, 2017 (₹) | 31st March, 2018 (₹) |
|---|---|---|---|
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholders’ Funds | |||
| (a) Share Capital | 4,00,000 | 5,00,000 | |
| (b) Reserves and Surplus (Balance in Statement of Profit and Loss) | 20,000 | 46,000 | |
| 2. Current Liabilities | |||
| (a) Sundry Creditors | 40,000 | 30,000 | |
| (b) Outstanding Expenses | 8,000 | 10,000 | |
| (c) Short-term Provision (Provision for Taxation) | 92,000 | 50,000 | |
| Total | 5,60,000 | 6,36,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| Tangible Asset | 1,00,000 | 1,32,000 | |
| 2. Current Assets | |||
| (a) Inventories | 1,60,000 | 1,80,000 | |
| (b) Trade Receivables | 2,40,000 | 2,30,000 | |
| (c) Cash and Cash Equivalents | 60,000 | 94,000 | |
| Total | 5,60,000 | 6,36,000 |
Or
Give two examples of Cash and Cash Equivalent. Mention the activities under which the following transactions will appear in Cash Flow Statement as per AS 3:
- Purchase of Fixed Assets
- Sale of Investment
- Redemption of Debentures
- Issue of Equity Share.
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Start your 14-day free trial to unlock the full solution →Net profit = change in surplus 26,000 + tax provision made 50,000 = 76,000 before tax. After working-capital changes (Creditors -10,000, Outstanding Exp +2,000, Inventories -20,000, Trade Receivables +10,000) cash from operations = 58,000; less tax paid 92,000 → operating (34,000). Investing: fixed asset purchase (32,000). Financing: share issue +1,00,000. Net +34,000.
Working (West Bengal HS Accountancy — Cash Flow Statement, AS 3): Provision for Taxation is treated as a non-current item — opening 92,000 is tax paid during the year, and the closing 50,000 is the current year's provision added back to find profit before tax. No depreciation is given; the rise in Tangible Asset is treated as purchase.
Cash Flow Statement of B Ltd. for the year ended 31st March, 2018
| Particulars | Amount | Amount |
|---|---|---|
| A. Cash Flow from Operating Activities | ||
| Net profit (46,000 - 20,000) | 26,000 | |
| Add: Provision for Taxation made | 50,000 | |
| Net profit before tax | 76,000 | |
| Add: Increase in Outstanding Expenses | 2,000 | |
| Add: Decrease in Trade Receivables | 10,000 | |
| Less: Decrease in Creditors | (10,000) | |
| Less: Increase in Inventories | (20,000) | |
| Cash generated from operations | 58,000 | |
| Less: Tax paid | (92,000) | |
| Net Cash used in Operating Activities (A) | (34,000) | |
| B. Cash Flow from Investing Activities | ||
| Purchase of Tangible Asset (1,32,000 - 1,00,000) | (32,000) | |
| Net Cash used in Investing Activities (B) | (32,000) | |
| C. Cash Flow from Financing Activities | ||
| Issue of Share Capital (5,00,000 - 4,00,000) | 1,00,000 | |
| Net Cash from Financing Activities (C) | 1,00,000 |
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