Answer Either Question No. 11 or Question No. 12
From the following Balance Sheet of ABC Ltd., prepare Cash Flow Statement for the year ended on 31.12.2022:
| Particulars | Note No. | 31st December, 2022 (₹) | 31st December, 2021 (₹) |
|---|---|---|---|
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholders’ Funds | |||
| (a) Share Capital | 1 | 4,00,000 | 3,80,000 |
| (b) Reserves and Surplus | 2 | 90,000 | 98,000 |
| 2. Non-Current Liabilities | |||
| Long-term Borrowing (8% Debentures) | 60,000 | 50,000 | |
| 3. Current Liabilities | |||
| (a) Trade Payables | 40,000 | 24,000 | |
| (b) Short-term Provision (Provision for Taxation) | 64,000 | 60,000 | |
| Total | 6,54,000 | 6,12,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| Fixed Assets | 5,30,000 | 4,90,000 | |
| 2. Current Assets | |||
| (a) Inventories | 60,000 | 50,000 | |
| (b) Trade Receivables | 3 | 52,000 | 62,000 |
| (c) Cash and Cash Equivalents | 4 | 12,000 | 10,000 |
| Total | 6,54,000 | 6,12,000 |
| Notes to Accounts | 31st December, 2022 (₹) | 31st December, 2021 (₹) |
|---|---|---|
| 1. Share Capital | ||
| Equity Share Capital | 3,00,000 | 2,80,000 |
| 10% Preference Share Capital | 1,00,000 | 1,00,000 |
| 4,00,000 | 3,80,000 | |
| 2. Reserves and Surplus | ||
| General Reserve | 26,000 | 20,000 |
| Profit & Loss | 66,000 | 82,000 |
| 92,000 | 1,02,000 | |
| Less: Preliminary Expenses | 2,000 | 4,000 |
| 90,000 | 98,000 | |
| 3. Trade Receivables | ||
| Debtors | 36,000 | 45,000 |
| Bills Receivable | 16,000 | 17,000 |
| 52,000 | 62,000 | |
| 4. Cash and Cash Equivalents | ||
| Cash at Bank | 10,000 | 8,500 |
| Cash in Hand | 2,000 | 1,500 |
| 12,000 | 10,000 |
Or
State the importance of Cash Flow Statement. Give one example each of operating and investing activities. (4 + 2)
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Start your 14-day free trial to unlock the full solution →Prepare the Cash Flow Statement (indirect): NPBT ₹ 54,000 + preliminary expenses ₹ 2,000 + working-capital changes → cash from operations ₹ 12,000 (after tax paid ₹ 60,000); investing (₹ 40,000) for fixed assets; financing ₹ 30,000 (equity ₹ 20,000 + debentures ₹ 10,000). Net increase ₹ 2,000 reconciles ₹ 10,000 opening to ₹ 12,000 closing cash.
This is a 6-mark WBCHSE HS Accountancy cash-flow-statement problem (West Bengal Class-12 Commerce; aligned with the NCERT/CBSE curriculum).
Working Note 1 — Net Profit before Tax:
| Particulars | ₹ |
|---|---|
| Surplus (Statement of P&L): closing 66,000 − opening 82,000 | (16,000) |
| Add: Transfer to General Reserve (26,000 − 20,000) | 6,000 |
| Add: Provision for Taxation made during the year | 64,000 |
| Net Profit before Tax | 54,000 |
Cash Flow Statement of ABC Ltd. for the year ended 31.12.2022 (Indirect Method)
| Particulars | ₹ | ₹ |
|---|---|---|
| A. Cash Flow from Operating Activities | ||
| Net Profit before Tax (W.N.1) | 54,000 | |
| Add: Preliminary Expenses written off (4,000 − 2,000) | 2,000 | |
| Operating Profit before Working Capital changes | 56,000 | |
| Add: Increase in Trade Payables (40,000 − 24,000) | 16,000 | |
| Add: Decrease in Trade Receivables (62,000 − 52,000) | 10,000 | |
| Less: Increase in Inventories (60,000 − 50,000) | (10,000) | 16,000 |
| Cash Generated from Operations | 72,000 | |
| Less: Tax Paid (opening provision) | (60,000) | |
| Net Cash from Operating Activities | 12,000 | |
| B. Cash Flow from Investing Activities | ||
| Purchase of Fixed Assets (5,30,000 − 4,90,000) | (40,000) | |
| Net Cash used in Investing Activities | (40,000) | |
| C. Cash Flow from Financing Activities | ||
| Proceeds from Issue of Equity Share Capital (3,00,000 − 2,80,000) | 20,000 | |
| Proceeds from Issue of 8% Debentures (60,000 − 50,000) | 10,000 | |
| Net Cash from Financing Activities | 30,000 | |
| Net Increase in Cash & Cash Equivalents (A + B + C) | 2,000 | |
| Add: Opening Cash & Cash Equivalents | 10,000 | |
| Closing Cash & Cash Equivalents | 12,000 |
The closing figure of ₹ 12,000 agrees with the balance sheet, confirming the statement.
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