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4.27
Cash Flow Statement
Problem 4.13
XLR
Ltd.
has
provided the
following balance
sheets
for
two
years
as
on
31-3-2013
and 31-3-2014.
2014| Assets
2013
2013 2014
Liabilities
5,000
2,00,000 2,50,000 Goodwill
60,000 Machinery
30,600 Land and Building
Share Capital
General reserve
P&L A/C
Bank Loan (Long term)
Provision for taxation
Sundry creditors
1,50,000 1,69,000
2,00,000 1,90,000
1,00,000 74,000
64,200
50,000
30,500
70,000 Stock
30,000| 35,000 Sundary debtors
1,50,000 1,35,200| Cash
80,000
500 600
Bank
3,000
5,30,500 5,10,800
5,30,500 5,10,800
The following additional information is supplied
During
the
year
ertded
31-3-2014, assets
of another
company were
acquired for
a
consideration
of
50,000
which
was
not
payable in cash
but
in
shares. These
assets
included:
25,000
20,000
Machinery
Stock
You
are
required
to
prepare a
Cash
Flow
Statement.
Solution
Missing information
is derived
by preparing the
following
accounts.
Net
profits
during the
year
profit
100+ Tr. to general reserve 10,000+ provision for taxation F 35,000 = 7 45,100.
Share Capital Accoant
2,00,000
By Balance b/d
By Machinery
By Stock
By Goodwill (Bal. Fig.)
To Balanee c/d
2,50,000
25,000
20,000
5,000
2,50,000
2,50,000
Machinery Account
R
1,50,000 By Depreciation (Bal. Fig.)
25,000 By Balance c/d
6,000
To Balance c/d
To Share Capital A/c
1,69 000
1.75.000 1.75.000
Provision for Taxation Account
30,000
By
Balance b/d
35,000 By P&L A/c
30,000
To Bank
35,000
To Balance c/d
65,000
65,000

Nanagement A: counting
4.28
Cash
Flow
Statement
for the
year
ending 31-3-2014
()
Cash
flow
from
0perating
Activities
Net profit
during
the
year
(100+
10,000+35,000)
Add :Depreciation on land and building
Depreciation on machinery
Decrease in stock (CA)
Decrease in debtors (CA)
45,100
10,000
6,000
26,000
15,800
Less: Decrease in creditors (CL)
Income tax paid
Net cash inflow from operating activities
1,02,900
()14,800
()30,000
58,100
(i) Cash flow from Investing Activities
NIL
(ii)
Cash flow from Financing Activities
Add : Isue of share capital (equal to stock acquired)
Less:
Repayment
of
Bank loan
Net cash outflow from financing activities
Net increase
in cash and cash equivalents
Cash and cash equivalents
in the beginning
of the
year
Cash
and cash equivalents
at
the end
of the
year
(600+ 8,000)
20,000
(70,000
50,000
8,100
500
8,600
EXAMINATION QUESTIONS
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