CHAPTER 5 CASH FLOW STATEMENT
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comCHAPTER 5CASH FLOW STATEMENTPoints to Remember :1. First decide the nature of enterprise it is financial or Non-Financial.2. For Calculating depreciation, check the Balance Sheet to find out thatvalues of assets are given at net value (i.e., written down value) or atGross Block (Shown Accumulated dep. A/c also). There after attemptquestion according to the instructions.3. Current Investment or marketable securities is a part of Cash andCash equivalent as per As-3 (revised.) if both are given separately thanmarketable securities will be consider as cash equivalent and remainingcurrent Investment will consider in Investing activities.4. Bank overdraft and cash credit will be consider in financial activity notunder working capital changes in operating activities.Meaning : It is a statement that shows flow (Inflow or outflow) of cash and cashequivalents during a given period of time.As per Accounting Standard-3 (Revised) the changes resulting in the flow of cash& cash equivalent arises on account of three types of activities i.e.,(1)Cash flow from Operating Activities.(2)Cash flow from Investing Activities.(3)Cash flow from Financing Activities.Cash: Cash comprises cash in hand and demand deposits with bank.Cash equivalents: Cash equivalents are short-term, highly liquid investment thatare readily convertible into known amount of cash and which are subject to aninsignificant risk of change in the value e.g. short-term investment. Generally,these investments have a maturity period of less than three months.Some examples of cash equivalent: Short-term deposits, marketable securities,treasury bills, commercial papers, money market funds, investment in preferenceshares if redeemable within three months provided that there is no risk of thefailure of the company.Some types of transaction which are considered movement between cash andcash equivalents are given below:1.Cash deposited into bank.2.Cash withdrawn from bank.[Class XII : Accountancy]362
For more FREE DOWNLOADS, visit www.aspirationsinstitute.com3.Sale of cash equivalent securities (e.g. Sale of short-term investment, saleof commercial papers)4.Purchases of cash equivalent securities (e.g. Purchase of short-terminvestment, Purchases of Treasury bills).The above types of transaction are part of cash and equivalents, so these areincluded in opening and closing cash and cash equivalent only. So these typesof transaction should not be included in cash flow from different activities likeoperating, investing, financing activities.Cash Flow StatementPreparation of cash flow statementCash flow from operating activities (A).Cash flow from investing activities (B).Cash flow from financing activities (C).Net increase/decrease in cash & cash equivalent (Total of theabove three activities) (A B C).Add: Cash & Cash equivalent in the beginning of the year (Given inopening balance sheet).Cash & Cash equivalent at the end of the year.Note 1: The student should ensure that the Cash & Cash equivalent at the endof the year as calculated above will be same as cash & cash equivalent given inclosing balance sheet.363[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comNote 2: A,B.C can have negative balance as well indicating cash used in operatinginvesting & financing activities respectively.Objectives of Cash Flow Statement1.To ascertain how much cash or cash equivalents have been generated orused in different activities i.e., operating/investing/financing activity.2.To ascertain the net changes in cash and cash equivalents.3.To assess the causes of difference between actual cash & cash equivalentand related net earnings/income.4.To help informulation of financial policies such as dividend policy, fixedassets policy, capital structure related policy.5.To help in short-term financial planning.6.To ascertain the liquidity of enterprises.Limitations of Cash Flow Statement1.Non cash transactions are not taken into considerationlike shares ordebentures issued to vendors, depreciation charged during the year.2.It is a statement related with past data.3.It is not used for judging the profitability of enterprise.4.Accrual accounting concept is ignored in this statement e.g.credit sales,credit purchases, outstanding expenses, accrued income are not included.Computation of Cash flows from different activities.(1)Cash flow from operating activities : Operating activities are the mainrevenue generating activities of the enterprises. It also includes all thosetransactions which are not included in investing and financing activities.Indirect Method of calculating the cash flow from Operating Activities: Underthis method Net Profit before Tax and Extra-ordinary Item is the startingpoint for further calculations.[Class XII : Accountancy]364
For more FREE DOWNLOADS, visit www.aspirationsinstitute.com(A)Calculation of Net Profit before Tax and Extra-ordinary Items:Difference between closing balance and opening balance of Balance inStatement of Profit & Loss A/c.Add:1. Dividend (final or proposel) paid during the year.2. Interim Dividend paid during the year.3. Profit Transferred to Reserve.(If reserve of current year increased from previous year).4. Provision for Taxation made during the year5. Extra Ordinary Item.If any Debited to Statement of Profit & Loss.Less: 1. Refund of Tax credited to Statement of P&L2.(.)Extraordinary-item if any credited to Statement of P&L(.)3.Reserves transferred back to statement of Profit and Loss(.)Net Profit before Tax and Extra-ordinary items.)Extraordinary items: These items are not related to normal business operation.Format :Cash Flow from Operating Activities I.Cash Flow from Operating Activities(A) Net Profit before Tax and Extraordinary Items (as per Working Note)Adjustment for Non-cash anc Non-operating Items(B) Add: Items to be Added—Depreciation—Goodwill, Patents and Trademarks Amortised—Interest on Bank Overdraft/Cash Credit—Interest on Borrowings (Short-term and Long-term) and Debentures—Writing off Underwriting Commission/Share Issue Expenses—Loss on Sale of Fixe d Assets—Increase in Provision for Doubtful Debts*.(C) Less: Items to be Deducted—Interest Income—Dividend Income—Rental Income—Gain (Profit) on Salt of Fixed Assets—Decrease in Provision for Doubtful Debts*.(D) Operating Profit before Working Capital Changes (A B - C)(E) Add: Decrease in Current A isets andIncrease in Current Liabilities—Decrease in Inventories (Stock)—Decrease in Trade receivables (Debtors/Bills Receivable)—Decrease in Accrued Incomes.365.[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.com————Decrease in Prepaid ExpensesIncrease in Trade Payables (Creditors/Bills Payable)Increase in Outstanding ExpensesIncrease in Advanc: Incomes.(F) Less: Increase in Current Assets andDecrease in Current Liabilities—Increase in Inventcries (Stock)—Increase in Trade R 'ceivables (Debtors/Bills Receivable)—Increase in Accruec Incomes—Increase in Prepaid Expenses—Decrease in Trade Payables (Creditors/Bills Payable)—Decrease in Outstanding Expenses—Decrease in Advam e Incomes.(G) Cash Generated from Operations (D E-F)(H) Less: Income Tax Paid (Net of Tax Refund)(I).(U) CashFlowfrom(orUsedin)peratingActivities.For the calculation of provision for Taxation made during the current year, theProvision for Taxation A/c is to be prepared as follows.Provision for Taxation AccountDr.Cr.Date ParticularsTo Bank A/c (Tax PaidDate.during the current year)To Balance c/d.By Statement of P&L.1,00,000 after considering the following1.Depreciation of fixed assets 20,0002.Writing off preliminary expenses 10,0003.Loss on sale of furniture 1,0004.Provision of Taxation 1,60,0005.Transfer to General reserve 14,0006.Profit on sale of Machinery 6,000[Class XII : Accountancy] By Balance b/d(Provision for taxation madeduring the currentyear).Illustration1. X Ltd. made a profit ofitems:Particulars366
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comThe following additional information is available to you:31.03.2016 ( )Particulars31.03.2017 ( )Debtors24,00030,000Creditors20,00030,000Bills Receivables20,00017,000Bills Payables16,00012,000400600Prepaid ExpensesCalculate Cash Flow from Operating Activities.Solution:Calculation of Net Profit before Tax and Extra-ordinary items:Net Profit (Given) 1,00,000Add: Provision for Taxation 1,60,000Transfer to general reserve Net Profit before Tax and Extra-ordinary item 2,74,00014,000Cash Flow from Operating Activities Particulars1. Cash flow from Operating ActivitiesNet Profit Before Tax And Extra-ordinary ItemAdjustment for non-cash and non-operating items:2,74,000Add : Depreciation on fixed assets20,000Preliminary expenses written off10,000367[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comLoss on sale of furniture1,00031,000Less: Profit on sale on machinery60003,05,000(6,000)2,99,000Operating Profit before working capital changesAdjustment for Working Capital ChangesAdd: Increase in creditors10,000Decrease in Bills Receivables3,00013,000Less: Increase in Debtors6,0003,12,000Increase in prepaid Expenses200Decrease in Bills Payable4,000(10,200)3,01,800(1,60,000)Cash generated from operation before TaxLess: Income tax PaidNet Cash inflow from Operating Activities1,41,8002. Cash Flow from Investing ActivitiesInvesting activities are those activities which are related to the acquisition (buying)and disposal (selling) of fixed assets and investment (other than cash equivalents).It also includes income from fixed assets and investment like rent received, interestreceived on investment, dividend received on investment in shares and mutualfunds.Inflows of Cash: (Plus items)Outflows of Cash (minus items)Cash Received from sale of Fixed Assets.Cash Received from sale of Investment.Excluding Marketable SecuritiesCash Received from sale of intangibleAssets like Patents.Interest Received,Dividend Received,Rent ReceivedCash paid for purchase of fixed assets.Cash paid for purchase of investment. ExcludingMarketable SecuritiesCash paid for purchase of intangibleFixed assets like goodwill, patents and copyrights.For the calculation of sale or purchase of fixed assets and investment, the followingaccounts are prepared:1.Fixed Assets Account2.Investment AccountFixed Assets Account: Fixed assets accounts may be prepared by two methods:(a)At written down value method (when provision for depreciation account/accumulated depreciation account is not maintained):[Class XII : Accountancy]368
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comFixed Assets Account (at written down value).Dr.DateCr.ParticularsTo Balance b/dTo Bank A/c (Additional Purchase)To Profit on sale of fixed assets A/c Date.Particulars By Bank A/c(Sale of investment)By Depreciation A/c(Depreciation on fixed assets sold)By Loss on sale of fixed assets A/cBy Depreciation A/c(Current year Depreciation onremaining fixed assets)By Balance c/d.(b).fixed Assets (at cost); When provision for depreciation account oraccumulated depreciation account has been separately maintained. In thismethod two separate accounts named Fixed Assets Account and Provisionfor Depreciation account are maintainedFixed Assets Account (at original cost)Dr.DateCr.Particulars DateTo Balance b/d.To Bank A/c (Additional .Purchase)To Profit on sale of fixed .assets A/cParticulars By Bank A/c(Sale of investment)ByProvisionforDepreciation A/c(Dep. on fixed assets sold)By Loss on sale of fixedassets A/c.By Balance c/d.Provision for Depreciation AccountDr.DateCr.Particulars DateParticulars .To Fixed Assets A/c(Total Depreciation providetill the date of sale on Fixedassets sold)To balance c/d.By Balance b/dBy Statement of Profit & Loss.A/c(Depreciation charged on fixedassets during the current yearincluding the part sold).369[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comPreparation of Investment Account:Dr.DateInvestment Account ParticularsCr.DateTo Balance b/d.To Bank A/c (Additional.Purchase).To Profit on sale ofinvestment A/c ParticularsBy Bank A/c(Sale of investment)By Loss on sale ofInvestment A/cBy balance c/d.Illustration2. From the following information calculate cash flow from investingactivities:31-03-2014( 00Machinery (at Cost)Accumulated DepreciationPatentsGoodwillInvestment31-03-2015 ( l Information(ι)During the year, a machine costing 50,000 with its accumulateddepreciation of 25,000 was sold for 20,000.(ιι)Patents were written off to the extent of 60,000 and some patents weresold at a profit of 10,000.(ιιι)40% of the investments held in the beginning of the year were sold at 10%Profit.(ι )Interest received on investment 25,500.( )Dividend received on investment 8,500.( ι)Rent received 5,000.Solution:Cash Flow from Investing Activities )25,5008,5005,0000Proceeds from sale of machineryProceeds from sale of investmentProceeds from sale of PatentsCash paid for purchase of machineryCash paid for purchase of InvestmentInterest ReceivedDividend ReceivedRent ReceivedNet Cash Used in Investing Activities[Class XII : Accountancy](2,51,000)370
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comWorking Notes:Investment AccountDr.DateCr. ParticularsDate2,50,000To Balance b/dTo Profit on sale of Particulars1,10,000By Bank A/c10,000(Sale of investment)Investment A/c5,00,000By balance c/d3,50,000To Bank A/c B/F)(Additional Purchase)6,10,0006,10,000Machinery Account (at original cost)Dr.DateCr. ParticularsDate5,00,000To Balance b/dParticularsBy Bank A/cTo Bank A/c (additional 20,000(Sale of investment)Purchase) (B/F)1,00,000By Provision for DepreciationA/c(Dep. on Machinery sold)By Loss on sale ofMachinery A/cBy balance c/d6,00,00025,0005,0005,50,0006,00,000Provision for Depreciation AccountDr.DateCr. Particulars25,000To Machinery A/c(TotalDepreciationMachinery sold)DateParticularsBy Balance b/dBy Statement of Profit & LossonTo Balance c/d1,20,0001,45,000371 1,00,00045,000(Depreciation charged onmachinery during the currentyear) (B/F)1,45,000[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comPatents AccountDr.Cr.DateParticularsTo Balance b/d Date2,00,00030,000By Bank A/c(B/F – Sale of Patents)To Profit on sale ofpatents A/c Particulars10,00060,000By Statement of Profit& Loss (Written off)By balance c/d1,20,0002,10,0002,10,0003. Cash Flow from Financing ActivitiesFinancing activities are those activities that result in the change in size andcomposition of the share capital (equity and preference) and borrowed fund of thebusiness enterprises. Generally cost related to these funds are also included infinancing activities like interest paid on loans and debentures and dividend paid onequity and preference share capital.Inflows of Cash: (Plus items)Outflows of Cash (minus items)1. Proceeds from Issue of equity sharescapital.1. Amount paid for repayment of long-term2. Proceeds from Issue of preference share2. Redemption of Preference share capitalin cash.capital.3. Proceeds from taking long-term loan andissue of debentures.4. Proceeds from Bank Overdraft and Cashcredit.loan.3. Redemption of Debenture in cash.4. Buy back of Equity shares (Extra-OrdinaryItem)5. Payment of Bank Overdraft and CashCredits.6. Interest paid on long term loan anddebentures7. Final Dividend paid.8. Interim dividend paid.9. Dividend paid on Preference Shares.[Class XII : Accountancy]372
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comIllustration3. From the following information, calculate the net cash flow fromFinancing Activities.Particulars31-3-2017( )31-3-2018( )10,00,00016,00,0009% Debentures1,50,0001,00,000Dividend Payable.50,00010% Preference Share Capital2,00,0003,00,000Equity Share CapitalAdditional Information1. Interest paid on Debentures 12,500.2. During the year 2017-2018, company issued bonus shares to equityshareholders in the ratio of 2:1 by capitalizing reserve.3. The interim dividend of 75,000 has been paid during the year.4. 9% Debentures were redeemed as 5% premium.5. Proposed equity divined for the years ended 31/3/2017 and 31/3/2018 ended 3,00,000 and 150000 respectively.Solution:Cash Flow from Financing Activities ParticularsProceeds from Issue of Equity Share Capital1,00,000Proceeds from Issue of 10% Preference Share Capital1,00,000Cash paid for Redemption of 9% Debentures (50,000 105%)(52,500)Interest paid on Debentures(12,500)interim Dividend paid(75,000)Final Dividend paid (3,00,000-50,000)Net Cash Used in Financing Activities)373(2,50,000)1,90,000[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comNote:1.Bonus shares worth 5, 00,000 issued to equity shareholder are not to beshown in the cash flow statement because there is no flow of cash by thisactivity.2.As per the provisions of As-4, dividend proposed by the Directors of thecompany for the current year Rs. 15,0000 will be shown in the notesto accounts as contingent liability. Dividend of the previous year of Rs.3,00,000 has been declared and approved in the annual general meetingof shareholders for current year will be shown as appropriation of profits ofcurrent year so will be added to determine the net profit before dividend,taxes and extraordinary item and as an outflow from the firm under thefinacing activity.3.Previous year proposed dividend- unpaid dividend final dividend paidduring the current year is cash used in financing activities.Financing Business Enterprise Transaction Treatment in Cash Flow StatementFinancing business enterprises are the business enterprises which dealin finance like investment companies, mutual fund house, banks. Theseenterprises purchases and sale of securities as their stock, so it is treated asoperating activities and interest received, dividend received and interest paidare considered as routine business activities and included in their operatingactivities.Comprehensive Illustration4:From the following Balance Sheets of X Ltd. as on31.03.2016 and 31.03.2017. Prepare a cash flow statement.Balance Sheet as at 31st March, 2016 and 2017ParticularsNote No.Figures as at theFigures as at theend of 31.3.2016end of 31.3.2017( )( )I. Equity and LiabilitiesShareholders’ funds(a) Share capital45,00065,000(b) Reserves and surplus25,00042,500Current liabilities[Class XII : Accountancy]374
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comTrade tories11,00013,000Trade alII. Assets(1) Non-current assets(a) Fixed assets(i)Tangible Assets(2) Current AssetsCash and cash equivalentsTotalNotes to AccountsParticularsFigures as at theFigures as at theend of 31.3.2016end of 31.3.2017( )( )Note No.1. Reserve and Surplus: General Reserve15,00027,500Balance in Statement of P&L A/c10,00015,00025,00042,500TotalAdditional Information:(i) Depreciation on fixed assets for the year 2016-17 was 14,700.(ii) An interim dividend 7,000 has been paid to the shareholders during the year.Solution: Calculation of Net Profit before Tax and Extraordinary item:Net Profit as per Balance in Statement of Profit & Loss A/c (15000-10,000)Add: Transfer to General Reserve (27,500 – 15,000)5,00012,5007,000Add: Interim dividend paid during the yearNet Profit before Tax and Extraordinary item37524,500[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comCash Flow StatementFor the year ended 31st March 2017Details ( )ParticularsAmount ( )A. Cash flow from Operating ActivitiesNet Profit Before Tax And Extra-ordinary Item24,500Adjustment for non-cash and non-operating items14,700Add : Depreciation on fixed assetsOperating Profit before working capital changes39,200Adjustment for Working Capital Changes:2,300Add: Increase in Trade Payables41,500Less: Increase in trade receivable(1,500)Increase in Inventories(2,000)Net Cash Inflow from Operating Activities38,00038,000(51,000)(51,000)B. Cash Flow from Investing ActivitiesPurchase of Fixed AssetsNet Cash Used in Investing ActivitiesC. Cash Flow from Financing ActivitiesIssue of share capital20,000Payment of interim dividend(7,000)Cash Flow from Financing Activities13,000NilNet Increase in Cash & Cash EquivalentAdd: Cash & Cash Equivalent at the beginning of year3,000Cash & Cash Equivalent at the end of year3,000Fixed Assets AccountCr.Dr.DateParticulars DateTo Balance b/d46,700To Bank A/c(additional purchase) (B.F)51,000ParticularsBy Depreciation A/c(Current year dep. on remainingfixed assets)By Balance c/d97,700 14,70083,00097,700Illustration 5: Prepare a cash Statement on the basis of the information given inthe Balance Sheets of Liva Ltd. as at 31.3.2017 and 31.3.2016:[Class XII : Accountancy]376
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comParticularsNote No.31.3.2017( )31.3.2016( )I. Equity and Liabilities(1) Shareholders’ funds(a) Share 00018,00054,00060,0001,07,00024,000(c) Trade Receivables40,00017,500(d) Cash and Cash-equivalents24,0009,5005,67,0003,81,000(b) Reserves and surplus1(2) Non-current Liabilities(a) Long term-borrowings(3) Current Liabilities(a) Trade PayablesTotalII. Assets(1) Non-current Assets(a) Fixed Assets(i) Tangible Assets(b) Non-current Investments(2) Current Assets(a) Current-Investments (Marketable)(b) InventoriesTotalNotes to Accounts:Note-12017 ( )ParticularsReserve and SurplusSurplus (Balance in statement of profit and loss)3771,32,0002016 ( )24,000[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comSolution:Cash Flow Statement of Liva Ltd.For the year ended 31st March 2017 as per AS-3 (Revised)Details ( )ParticularsAmounts ( )Cash Flows from Operating Activities:Net Profit before tax & extraordinary items1,08,000Add : Non cash and Non-operating charges–Operating profit before working capital changes1,08,000Add : Increase in Current LiabilitiesIncrease in trade payables48,000Less : Increase in Current Assets:Increase in trade receivables1,56,000Increase in inventories(22,500)(83,000)Cash generated from Operating ActivitiesCash flow from Investing Activities:50,500Purchase of fixed assets(42,000)Purchase of noncurrent investmentsCash used in investing activities.(30,000)(72,000)Cash flows from Financing Activities:30,000Issue of share capital30,0008,500Cash flow from financing activitiesNet increase in cash & cash equivalentsAdd: Opening balance of cash & cash equivalents:Marketable Securities60,000Cash & cash Equivalents9,50069,500Closing balance of cash & cash equivalents:Marketable Securities54,000Cash & Cash equivalents24,00078,000[Class XII : Accountancy]378
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comIllustration 6: From the following information, complete the Cash flow Statementof RK Ltd.Cash flow StatementFor the year ended on 31-3-2017 ParticularsCash flow from operating Activities:Net profit before tax and Extraordinary itemsAdjustment for Non-cash and non operating items:DepreciationLoss on sale of MachineryOperating profit before working capital changesAdjustment for changes in working Capital:Capital:Decrease in Trade PayablesIncrease in InventoryCash generated from operations before tax & extraordinary itemsLess: Income tax paidNet cash flow from operating activities: A.(8,000)(.)B Cash flow from Investing Activities:Purchase of MachinerySale of MachineryNet cash flow from Investing ActivitiesC .Cash flow from Financing Activities:Proceeds from Issue of SharesNet cash flow from Financing Activities50,000(.).(.).Add: Cash & cash equivalents at the beginning of the period. .Cash & cash equivalents at the end of the period.(A B C)net Increase in cash & Cash Equivalents during the yearNotes to AccountParticulars31-3-2017( )Note 1. Reserve & SurplusGeneral ReserveBalance in Statement of Profit & Loss55,00070,00031-3-2016( )40,00050,00090,0001,25,000Note 2. Cash and Cash equivalents Cash at BankNote 3. Short term ProvisionsProvision for 00020,000[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comAdditional Information:1.Depreciation charges on Building for the year 2016-17 was 10,000.2.During the year 2016-17, machinery of 1,38,000 was purchased.3.A part of machinery costing̀20,000 with accumulated depreciation of 6,500 was sold for 8,500.4.Income tax paid during the year 2016-17 was 18,000.Solution:Cash flow StatementFor the year ended on 31-3-2017B. ParticularsCash flow from operating Activities:Net profit before tax and Extraordinary itemsAdjustment for Non-cash and non-operating items:DepreciationLoss on sale of MachineryOperating profit before working capital changesAdjustment for charges in working Capital:Decrease in Trade PayablesIncrease in InventoryCash generated from operations before tax & extraordinary itemsLess: Income tax paidNet cash flow from operating activities:B Cash flow from Investing Activities:Purchase of MachinerySale of MachineryNet cash flow from Investing ActivitiesC .Cash flow from Financing Activities:Proceeds from Issue of SharesNet cash flow from Financing 01,12,500(A B C)net Increase in cash & Cash Equivalents during the yearAdd: Cash & cash equivalents at the beginning of the periodCash & cash equivalents at the end of the period15,00037,00052,000Working Notes1.Calculation of Net Profit before tax and extraordinary items: Difference in Balance in Statement of P&L (70,000-50,000)20,000Add: Transfer to General Reserve15,000Provision for Taxation23,00058,000[Class XII : Accountancy]380
For more FREE DOWNLOADS, visit www.aspirationsinstitute.com2. Provision for Taxation AccountDr.Cr. ParticularsTo Bank A/c(Tax paid)To Balance c/d18,00025,000ParticularsBy balance b/dBy Statement of P&L(Balancing Figure- Provisionmade during the year)43,000 20,00023,00043,000Note:1.There is no need to prepare Machinery A/c as both purchase andsale values are given in the question.2.Proceeds from issue of share have been calculated by movingbackwards from the figure of Net Increase in cash & cashEquivalents i.e.;i.e.15,000 32,000 (129500) Cash flow from financing activityIllustration 7: Following is the Balance sheet of Thermal Power Ltd. as at 31-32016 and 31-3-2017.31-03-2017 ( )Particulars31-03-2017 ( )I. Equity and Liabilities(1) Shareholders’ funds(a) Share capital12,00,00011,00,000(b) Reserves and surplus (Statement of Profit & Loss)(2) Non-current Liabilities300,0002,00,000(a) Long term-borrowings(3) Current 000(a) Current-Investments2,40,0001,50,000(b) Inventories1,29,0001,21,000(c) Trade 0017,51,000(a)(b)Trade PayablesShort term provisionTotalII. Assets(1) Non-current Assets(a) Fixed Assets31-03-2017 31-03-2016(Tangible): MachineLess Depreciation Provision(Intangible): Goodwill(2) Current Asset12,70,00010,00,000(200,000)(150,000)(d) Cash and Cash-equivalentsTotal381[Class XII : Accountancy]
For more FREE DOWNLOADS, visit www.aspirationsinstitute.comAdditional Information:During the year, a piece of machinery costing 24,000 on which accumulateddepreciation was 16,000 was sold for 6,000. Prepare cash flow statement.(CBSE Modified)Solution:Cash flow statementS.No.AParticularsDetails( )Cash Flow from Operating ActivitiesNet Profit before tax and extraordinary items:(1,00,000Profit 50,000Provision for tax)Items to be AddedGoodwill (Written off)Depreciation (during the year)Loss on sale of Tangible AssetsOperating Profit before working Capital ChangesLess: increase in current assets, decrease in current liabilitiesDecrease in Trade PayablesIncrease in InventoriesIncrease in Trade ReceivablesBAmount ( 8,000)(27,000)Less: Tax Paid(60,000)2,30,000(77,000)Net cash flow from operating activities1,53,000Cash Flow from Investing Activities:Purchase of Tangible Assets (Machine)Sale of Tangible Assets (Machine)(2,94,000)6,000(2,88,000)CDECash Flow from Financing Activities:Issue of Share CapitalIssue of Long Term LoanNet Increase or Decrease in Cash & Cash Equivalents (A B C)1,00,00070,000Cash & Cash Equivalents: Opening BalanceCurrent Investment3,75,0001,50,0005,25,000Cash & Cash Equivalents: Closing balanceCurrent te:1.Cash and Cash Equivalents includes cash and current investment(assuming their maturity to be less than 3 months)[Class XII : Accountancy]382
For more FREE DOWNLOADS, visit
Meaning : It is a statement that shows flow (Inflow or outflow) of cash and cash equivalents during a given period of time. As per Accounting Standard-3 (Revised) the changes resulting in the flow of cash & cash equivalent arises on account of three types of activities i.e., Cash flow from Operating Activities. Cash flow from Investing Activities.
Actual Cash Flow Statement Analysis An Actual Cash Flow Statement shows where cash actually came from and how it was used in the operation. It can be compared with a Projected Cash Flow Statement for the same year to assess the overall operation on a cash flow basis. This can be done on a quarterly basis as the year progresses if quarters in
Part One: Heir of Ash Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26 Chapter 27 Chapter 28 Chapter 29 Chapter 30 .
Statement of Cash Flow (Indirect Method) Cash flow from operating activities Sources: Cash Sales and collections of A/R Uses: Cost of goods sold Cash operating expenses . however, the methodology and format are quite different. The objective of the statement of cash flow is to show the three types of activities on a pure cash basis. However .
C. Mulford: Cash Flow Analysis, p. 1 Analyzing Cash Flows Selected income statement data and a cash flow statement in the UCA format are provided below for 5 cases. Each case is a variation on the income and cash flow statement for the same company. In fact
Cash flow statements AS 3 cash flow statements IAS 7 statement of cash flows Ind AS 7 statement of cash flows Bank overdraft Financing activities Cash &cash equivalents Same as IFRS Cash flows from extra ordinary items to be classified as operating, financing and investing activities. Cash flow statements do not reflect any
Unit 4: Cash Flow Statement(Marks 8) . Sample Format for Cash Flow from Operating Activity Statement of Cash Flow from Operating Activities (Indirect Method) . (13) Give any two items of cash & cash equivalents’ as per Accounting Standard – 3. (2008,11,14) Ans.:
E5-13 Statement of cash flows—classifications. Moderate 15–20 E5-14 Preparation of a statement of cash flows. Moderate 25–35 E5-15 Preparation of a statement of cash flows. Moderate 25–35 E5-16 Preparation of a statement of cash flows. Moderate 25–35 E5-17 Preparation of a statement of cash flows and a statement of financial position.
time test takers of the American Board of Radiology radiation biology (left), physics (center), and clinical (right) qualifying examinations from 2005-2016 [2017 unavailable]. Reported average pass rates from 2018 are plotted as outliers (for radiation biology and physics) and labeled. Two-sided P-values (with distribution of normality confirmed by the Shapiro test) demonstrate that the .
