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    Cash Flow Statement Problem

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    api-3842194
    The document provides summarized balance sheets for Growell Ltd. as of March 31, 1998 and 1999 along with additional financial information for the year ended March 31, 1999. Using this information, the solution prepares various ledger accounts and an adjusted profit and loss statement. It then provides a cash flow statement using the indirect method that shows net cash from operating activities was Rs. 107,300, net cash used in investing activities was Rs. 6,200, and net cash used in financing activities was Rs. 93,000 resulting in a net increase in cash and cash equivalents of Rs. 8,100.

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    Cash Flow Statement Problem

    Uploaded by

    api-3842194
    3K views2 pages
    The document provides summarized balance sheets for Growell Ltd. as of March 31, 1998 and 1999 along with additional financial information for the year ended March 31, 1999. Using this information, the solution prepares various ledger accounts and an adjusted profit and loss statement. It then provides a cash flow statement using the indirect method that shows net cash from operating activities was Rs. 107,300, net cash used in investing activities was Rs. 6,200, and net cash used in financing activities was Rs. 93,000 resulting in a net increase in cash and cash equivalents of Rs. 8,100.

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    The document provides summarized balance sheets for Growell Ltd. as of March 31, 1998 and 1999 along with additional financial information for the year ended March 31, 1999. Using this information, the solution prepares various ledger accounts and an adjusted profit and loss statement. It then provides a cash flow statement using the indirect method that shows net cash from operating activities was Rs. 107,300, net cash used in investing activities was Rs. 6,200, and net cash used in financing activities was Rs. 93,000 resulting in a net increase in cash and cash equivalents of Rs. 8,100.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    3K views2 pages

    Cash Flow Statement Problem

    Uploaded by

    api-3842194
    The document provides summarized balance sheets for Growell Ltd. as of March 31, 1998 and 1999 along with additional financial information for the year ended March 31, 1999. Using this information, the solution prepares various ledger accounts and an adjusted profit and loss statement. It then provides a cash flow statement using the indirect method that shows net cash from operating activities was Rs. 107,300, net cash used in investing activities was Rs. 6,200, and net cash used in financing activities was Rs. 93,000 resulting in a net increase in cash and cash equivalents of Rs. 8,100.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Question:

    Following are the summarized balance sheets of Growell Ltd., as on 31st March, 1998 and 1999.
    1998 1999 1998 1999
    Share Capital 200,000 250,000 Land & Building 200,000 190,000
    General reserve 50,000 60,000 Machinery 150,000 169,000
    P L A/c 30,500 30,600 Stock 100,000 74,000
    Bank Loan 70,000 - Debtors 80,000 64,200
    Creditors 150,000 135,200 Cash 500 800
    Provision for Taxation 30,000 35,000 Bank - 7,800
    Goodwill - 5,000
    530,500 510,800 530,500 510,800

    Additional Information:
    During the year ended 31st March, 2004
    (i) Dividend of Rs. 23,000 was paid.
    (ii) Assets of another company were purchased for a consideration of Rs. 50,000 payable in shares.
    The following assets were purchased:
    Stock: Rs. 20,000; Machinery Rs. 25,000
    (iii) Machinery was further purchased for Rs. 8,000
    (iv) Depreciation written off on machinery Rs. 12,000; and
    (v) Income-tax provided during the year Rs. 33,000;
    (vi) loss on sale of machinery Rs. 200 was written off to general reserve.
    You are required to prepare the Statement of Cash flow.

    Solution:

    Share Capital Account


    By Balance b/d 200,000
    By Machinery 25,000
    By Stock 20,000
    To Balance c/d 250,000 By Goodwill 5,000
    250,000 250,000

    General Reserve Account


    To Machinery 200 By Balance b/d 50,000
    To Balance c/d 60,000 By P L A/c 10,200
    60,200 60,200

    Provision for Taxation


    To Bank A/c 28,000 By Balance b/d 30,000
    To Balance c/d 35,000 By P L A/c 33,000
    63,000 63,000

    Machinery
    To Balance b/d 150,000 By Depreciation 12,000
    To Share Capital 25,000 By General Res. 200
    To Bank 8,000 By Bank 1,800
    By Balance c/d 169,000
    183,000 183,000

    Adjusted Profit & Loss Account


    To Proposed Dividend 23,000 By Balance b/d 30,500
    To General res. 10,200 By Operationg Profit
    To Depreciation 22,000 before working capital
    To provision for Tax 33,000 changes 88,300
    To Balance c/d 30,600
    118,800 118,800

    Note: Depreciation on Land & Building


    Opening Balance 200,000
    Less: Closing balance 190,000
    10,000

    Growell Ltd.
    Cash Flow Statement ( As per AS 3: Indirect Method)
    for the year ended 31st March, 1999.
    Particulars Rs. Rs.

    Cash flow from Operating Activities:


    Operating profit before working capital changes. 88,300
    Add: Decrease in Stock [100000-(74000-20000)] 46,000
    Add: Decrease in Debtors 15,800
    Less: Decrease in Creditors - 14,800
    Cash generated from operations 135,300
    Less: Income taxes PAID 28,000
    Net cash from operating activities 107,300

    Cash flows from investing activities:


    Purchase of Machinery - 8,000
    Proceeds from Sale of Machinery 1,800 - 6,200
    Net cash from investing activities

    Cash flows from financing activities


    Dividends paid - 23,000
    Repayment of Bank Loan - 70,000
    Net cash used in financing activities - 93,000

    Net increase in cash and cash equivalents 8,100


    Add: Cash and cash equivalents at beginning of period 500
    Cash and cash equivalents at end of period (800 + 7800) 8,600

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