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NCERT · Class 12 · Accountancy

Unit 6: Cash Flow Statement

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Numerical Questions for NCERT Solutions Accountancy Part 2 Class 12 Chapter 6

12 questions
Q1Written answer

Anand Ltd. arrived at a net income of ₹ 5, 00,000 for the year ended March 31, 2017. Depreciation for the year was ₹ 2,00,000. There was a profit of ₹ 50,000 on assets sold, which was transferred to the statement of profit and loss account. Trade Receivables increased during the year ₹ 40,000, and trade payables also increased by ₹ 60,000. Compute the cash flow operating activities by the indirect approach.

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Worked solution

The solution to this question is as follows:

Cash Flow from Operating Activities as on March 31, 2017
Particulars Amount

(₹)

 Amount

(₹)
Net Profit during the year 5,00,000
Items to be adjusted:
Add: Depreciation 2,00,000
Less: Gain on sale of assets (50,000) 1,50,000
Operating Profit before Working Capital changes 6,50,000
Add: Increase in Trade Payables 60,000
Less: Increase in Trade Receivables (40,000) 20,000
Net Cash from Operations 6,70,000
Q2Written answer

From the information given below, you are required to calculate the cash paid for the inventory:

Particulars (₹)
Inventory in the beginning 40,000
Credit Purchases 1,60,000
Inventory at the end 38,000
Trade payables in the beginning 14,000
Trade payables at the end 14,500
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Worked solution

The solution to this question is as follows:

Trade Payables Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Cash (Balancing fig.) 1,59,500 Balance b/d 14,000
 Balance c/d 14,500 Purchases 1,60,000
1,74,000 1,74,000

Therefore the cash paid for Inventory amounts to ₹ 1, 59,500.

Q3Written answer

For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow, viz., operating, investing and financing.

(a) Acquired machinery for ₹ 2,50,000, paying 20% by cheque and executing a bond for the balance payable.

(b) Paid ₹ 2,50,000 to acquire shares in Informa Tech. and received a dividend of ₹ 50,000 after the acquisition.

(c) Sold machinery of original cost ₹ 2,00,000 with an accumulated depreciation of ₹ 1,60,000 for ₹

60,000.

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Worked solution

The solution to this question is as follows:

(a)
NCERT ACT CLASS 12 Chp 6-9

Part-payment of ₹ 50,000 for acquiring machinery and ₹ 2,50,000 is related to investing activities.

(b)

₹
Amount paid for acquiring shares (2,50,000)
Dividend received 50,000
Net cash used in investing activities (2,00,000)

Amount paid to acquire assets and dividends received is a part of investing activities.

(c) Inflow of cash of ₹ 60,000 on the sale of machinery is a part of investing activities.

Q4Written answer

The following is the profit and loss account of Yamuna Limited:

Statement of Profit and Loss of Yamuna Ltd.,

for the Year Ended March 31, 2017
Particulars Note No. Amount

(₹)
i) Revenue from Operations 10,00,000
ii) Expenses
Cost of Materials Consumed 1 50,000
Purchase of Stock-in-trade 5,00,000
Other Expenses 2 3,00,000
Total Expenses 8,50,000
iii) Profit before Tax (i – ii) 1,50,000

Additional information:

(i) Trade receivables decrease by ₹ 30,000 during the year.

(ii) Prepaid expenses increase by ₹ 5,000 during the year.

(iii) Trade payables increase by ₹ 15,000 during the year.

(iv) Outstanding expenses payable increased by ₹ 3,000 during the year.

(v) Other expenses included depreciation of ₹ 25,000. 

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Worked solution

Compute net cash from operations for the year ended March 31, 2017, by the indirect method.

The solution to this question is as follows:

Cash Flow from Operating Activities of Yamuna Limited as on March 31, 2017
Particulars Amount

₹

 Amount

₹
Net Profit earned during the year 1,50,000
Items to be added:
Depreciation 25,000
Operating Profit before Working Capital changes 1,75,000
Add: Increase in Current Liabilities
Outstanding Expenses 3,000
Add: Decrease in Current Assets
Trade Receivables 30,000
Stock 50,000 83,000
Less: Decrease in Current Liabilities
Trade Creditors (15,000)
Less: Increase in Current Assets
Prepaid Expenses (5,000) (20,000)
Net Cash from Operations 2,38,000
Q5Written answer

Compute cash from operations from the following figures:

(i) Profit for the year 2016-17 is a sum of ₹ 10,000 after providing for depreciation of ₹ 2,000.

(ii) The current assets and current liabilities of the business for the year ended March 31, 2016, and 2015 are as follows:

Particular March
31, 2016
(₹)		 March
31, 2017
(₹)
Trade Receivables 14,000 15,000
Provision for Doubtful Debts 1,000 1,200
Trade Payables 13,000 15,000
Inventories 5,000 8,000
Other Current Assets 10,000 12,000
Expenses payable 1,000 1,500
Prepaid Expenses 2,000 1,000
Accrued Income 3,000 4,000
Income received in advance 2,000 1,000
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Worked solution

The solution to this question is as follows:

Cash Flow Statement

for the Year Ending March 31, 2017
Particulars Details

(₹)

 Amount

(₹)
Cash from Operating Activities
 Net Profit 10,000
Items to be added:
  Depreciation 2,000 2,000
Operating Profit before Working Capital Adjustments 12,000
Less: Increase in Current Assets
Trade Receivables (1,000)
Accrued Income (1,000)
Accrued Income (2,000)
Other Current Assets (3,000)
Inventories
Add: Increase in Current Liabilities
Provision for Doubtful Debts 200
Trade Payables 2,000
Expense Payable 500
Add: Decrease in Current Assets
Prepaid Expenses (1,000)
Less: Decrease in Current Liabilities
Income received in advance 1,000
Net Cash From Operating Activities 7,700
Q6Written answer

From the following particulars of Bharat Gas Limited, calculate cash flows from investing activities. Also, show the workings clearly preparing the ledger accounts:

Balance Sheet of Bharat Gas Ltd. as on 31 Mar. 2016 and 31 Mar. 2017  
Particulars Note No. Figures as the end of 2017
(₹)		 Figures as at the
end of reporting 2016
(₹)
II) Assets
1. Non-current Assets
a) Fixed assets
i) Tangible assets 1 12,40,000 10,20,000
ii) Intangible assets 2 4,60,000 3,80,000
b) Non-current investments 3 3,60,000 2,60,000
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Worked solution
Notes 1 Tangible assets = Machinery
2 Intangible assets = Patents

Notes

Figures of the current year Figures of the previous year
1. Tangible Assets
Machinery 12,40,000 10,20,000
2. Intangible Assets
Goodwill 3,00,000 1,00,000
Patents 1,60,000 2,80,000
4,60,000 3,80,000
3. Non-current Investments
10% long-term investments 1,60,000 60,000
Investment in land 1,00,000 1,00,000
Shares of Amartex Ltd. 1,00,000 1,00,000
3,60,000 2,60,000

Additional Information:

(a) Patents were written off to the extent of ₹. 40,000, and some patents were sold at a profit of ₹. 20,000.

(b) A machine costing ₹ 1,40,000 (Depreciation provided thereon ₹ 60,000) was sold for ₹ 50,000. Depreciation charged during the year was ₹ 1,40,000.

(c) On March 31, 2016, 10% of investments were purchased for ₹ 1,80,000, and some investments were sold at a profit of ₹ 20,000. Interest on investment was received on March 31, 2017.

(d) Amartax Ltd. paid dividends @ 10% on its shares.

(e) A plot of land had been purchased for investment purposes and let out for commercial use, and rent received ₹ 30,000.

The solution to this question is as follows:

Cash Flow from Investing Activities
Particulars Amount

₹

 Amount

₹
Cash Inflow
Proceeds from Sale of Patents 1,00,000
Proceeds from Sale of Machinery 50,000
Proceeds from Sale of 10% Long-term Investment 1,00,000
Interest received on 10% Long-term Investment 6,000
Dividend Received from Amartax Ltd. 10,000
Rent Received 30,000 2,96,000
Cash Outflow
Purchase of Goodwill (2,00,000)
Purchase of Machinery (4,40,000)
Purchase of 10% Long-term Investment (1,80,000) (8,20,000)
Net Cash used in Investing Activities (5,24,000)
Patents Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Balance b/d 2,80,000 Profit and Loss (written off) 40,000
Profit and Loss  (Profit on sale) 20,000 Bank (sale- Balancing figure) 1,00,000
Balance c/d 1,60,000
3,00,000 3,00,000
Machinery Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Balance b/d 10,20,000 Depreciation 1,40,000
Bank (Purchases- Balancing figure) 4,40,000 Bank 50,000
Profit and Loss 30,000
Balance c/d 12,40,000
14,60,000 14,60,000
10% Long-term Investment Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Balance b/d 60,000 Bank  (Balancing figure) 1,00,000
Bank 1,80,000
Profit and Loss (Profit on sale) 20,000 Balance c/d 1,60,000
2,60,000 2,60,000
Q7Written answer

From the following Balance Sheet of Mohan Ltd., prepare the cash flow Statement.

Balance Sheet of Mohan Ltd.,
as on 31st March 2016 and 31 March 2017
Particulars Note No. March 31, 2017
(₹)		 March 31, 2016
(₹)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Equity share capital 3,00,000 2,00,000
b) Reserves and surplus 2,00,000 1,60,000
2. Non-current liabilities
a) Long-term borrowings 1  80,000 1,00,000
3. Current liabilities
Trade payables 1,20,000 1,40,000
Short-term provisions 2 70,000 60,000
Total 7,70,000 6,60,000
II) Assets
1. Non-current assets
Fixed assets 3 5,00,000 3,20,000
2. Current assets
a) Inventories 1,50,000 1,30,000
b) Trade receivables 4 90,000 1,20,000
c) Cash and cash equivalents 5 30,000 90,000
Total  7,70,000 6,60,000
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Worked solution

Notes to accounts:

2017 2016
1. Long-term borrowings
Bank Loan 80,000 1,00,000
2. Short-term provision
Proposed dividend 70,000 60,000
3. Fixed assets 6,00,000 4,00,000
Less: Accumulated Depreciation 1,00,000 80,000
(Net) Fixed Assets 5,00,000 3,20,000
4. Trade receivables
Debtors 60,000 1,00,000
Bills receivables 30,000 20,000
90,000 1,20,000
5. Cash and cash equivalents
Bank 30,000 90,000

Additional Information:

Machine Costing ₹ 80,000 on which accumulated depreciation was ₹ 50,000 was sold for ₹ 20,000.

The solution to this question is as follows:

Cash Flow Statement of Mohan Ltd.
Particulars Amount

₹

 Amount

₹
A. Cash Flow from Operating Activities
Profit as per the Balance Sheet  (2,00,000 – 1,60,000) 40,000
Proposed Dividend 70,000
Net Profit before Taxation and Extraordinary items 1,10,000
Adjustments:
Depreciation 70,000
Loss on Sale of Machine 10,000 80,000
Operating Profit before Working Capital changes 1,90,000
Add: Decrease in Current Assets
Debtors 40,000 40,000
2,30,000
Less: Increase in Current Assets
Inventories (20,000)
Bills Receivable (10,000)
Less: Decrease in Current Liabilities
Trade Payables (20,000) (50,000)
Net Cash from Operations 1,80,000
B. Cash Flow from Investing Activities
Proceeds from Sale of Fixed Assets 20,000
Purchases of Fixed Assets (2,80,000)
Net Cash Outflow from Investing Activity (2,60,000)
C. Cash Flow from Financing Activities
Issue of Shares 1,00,000
Bank Loan Paid (20,000)
Dividend Paid (60,000)
Net Cash from Financing Activities 20,000
D. Net Decrease in Cash and Cash Equivalents (A+B+C) (60,000)
Add: Cash and Cash Equivalents in the beginning 90,000
E. Cash and Cash equivalents at the end 30,000
Fixed Assets Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Balance b/d 4,00,000 Bank 20,000
Bank (Purchases- Balancing fig.) 2,80,000 Profit and Loss 10,000
Accumulated Depreciation 50,000
Balance c/d 6,00,000
6,80,000 6,80,000
Accumulated Depreciation Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Fixed Assets 50,000 Balance b/d 80,000
Balance c/d 1,00,000 Profit and Loss (Balance fig.) 70,000
1,50,000 1,50,000
Q8Written answer

From the following balance sheets of Tiger Super Steel Ltd., prepare the cash flow statement:

Balance Sheet of Tiger Super Steel Ltd.
as at 31st March 2014 and 31st March 2017
Particulars Note No. March 31, 2017
(₹)		 March 31, 2016
(₹)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital 1 1,40,000 1,20,000
b) Reserves and surplus 2 22,800 15,200
2. Current Liabilities
a) Trade payables 3 21,200 14,000
b) Other current liabilities 4 2,400 3,200
c) Short-term provisions 5 28,400 22,400
Total 2,14,800 1,74,800
II) Assets
1. Non-Current Assets
a) Fixed assets
i) Tangible assets 6 96,400 76,000
ii) Intangible assets 18,800 24,000
b) Non-current investments 14,000 4,000
2. Current Assets
a) Inventories 31,200 34,000
b) Trade receivables 43,200 30,000
c) Cash and Cash Equivalents 11,200 6,800
Total  2,14,800 1,74,800

Notes to accounts:

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Worked solution
2017 2016
1. Share Capital
Equity share capital 1,20,000 80,000
10% Preference share capital 20,000 40,000
1,40,000 1,20,000
2. Reserves and surplus
General reserve 12,000 8,000
Balance in the statement of profit and loss 10,800 7,200
22,800 15,200
3. Trade payables
Bills payable 21,200 14,000
4. Other current liabilities
Outstanding expenses 2,400 3,200
5. Short-term provisions
Provision for taxation 12,800 11,200
Proposed dividend 15,600 11,200
28,400 22,400
6. Tangible assets
Land and building 20,000 40,000
Plant 76,400 36,000
96,400 76,000

Additional Information:
Depreciation Charge on land & building ₹ 20,000, and Plant ₹ 10,000 during the year.

The solution to this question is as follows:

Cash Flow Statement of Tiger Super Steels Ltd
Particulars Amount

₹

 Amount

₹
A. Cash Flow from Operating Activities
Profit as per the Balance Sheet (10,800 –7,200) 3,600
General Reserve 4,000
Proposed Dividend 15,600
Provision for Taxation 12,800
Net Profit before Taxation and Extraordinary 36,000
Items to be added:
Depreciation on Land and Building 20,000
Depreciation on Plant 10,000
Goodwill written off 5,200 35,200
Operating Profit before Working Capital changes 71,200
Add: Increase in Current Liabilities
Bills Payable 7,200
Add: Decrease in Current Assets
Inventories 2,800 10,000
81,200
Less: Increase in Current Assets
Trade Receivables (13,200)
Less: Decrease in Current Liabilities
Outstanding Expenses (800) (14,000)
Cash Generated from Operating Activities 67,200
Less: Income Tax paid (11,200)
Net Cash from Operating Activities 56,000
B. Cash Flow from Investing Activities
Purchases of Plant (40,400)
Purchases of Investment (20,000)
Net Cash used in Investing Activities (60,400)
C. Cash Flow from Financing Activities
Issue of Equity Shares 40,000
Dividend paid (11,200)
Redemption of 10% Preference Shares (20,000)
Net Cash from Financing Activities 8,800
D. Net Increase in Cash and Cash Equivalent 4,400
Add: Cash and Cash Equivalent in the beginning 6,800
E. Cash and Cash Equivalents at the end 11,200

Working Notes:

1.

Plant Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
To Balance b/d 36,000 By Depreciation 10,000
To Bank A/c (Purchases- Balancing figure) 50,400 By Balance c/d 76,400
86,400 86,400

2.

Net Profit before Tax 3,600
Profit and Loss Account 12,800
Less: Provision for Tax 16,400
Q9Written answer

From the following information, prepare a cash flow statement.

Particulars Note No. 31st March
2015
(₹)		 31st March
2014
(₹)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital 7,00,000 5,00,000
b) Reserves and surplus 4,70,000 2,50,000
2. Non-current Liabilities
(8% Debentures) 4,00,000 6,00,000
3. Current Liabilities
a) Trade payables 9,00,000 6,00,000
Total 24,70,000 19,50,000
II) Assets
1. Non-current assets
a) Fixed assets
i) Tangible 7,00,000 5,00,000
ii) Intangible-Goodwill 1,70,000 2,50,000
2. Current assets
a) Inventories 6,00,000 5,00,000
b) Trade Receivables 6,00,000 4,00,000
c) Cash and cash equivalents 4,00,000 3,00,000
Total  24,70,000 19,50,000

Additional Information:

Depreciation Charge on the plant amount to ₹ 80,000.

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Worked solution
Cash Flow Statement

for the year ending March 31, 2015
Particulars Details

(₹)

 Amount

(₹)
A. Cash from Operating Activities
Net Profit 2,20,000
Items to be Added:
Interest on Debentures 48,000
Depreciation on Fixed Assets 80,000
Goodwill Written-off 80,000 2,08,000
Operating Profit before Working Capital Adjustments 4,28,000
Add: Increase in Current Liabilities
Creditors 3,00,000
Less: Increase in Current Assets
Inventories (1,00,000)
Trade Receivables (2,00,000) –
Cash Generated from Operations 4,28,000
Less: Tax Paid –
Net Cash From Operating  Activities  4,28,000
B. Cash From Investing Activities
Purchase of Fixed Assets (WN) (2,80,000)
Net Cash From Investing Activities (2,80,000)
C. Cash From Financing Activities
Issue of Share Capital 2,00,000
Redemption of Debentures (2,00,000)
Interest Paid on Debentures (48,000) (48,000)
Net Cash From Financing Activities (C) (48,000)
Net Increase in Cash (A + B + C) 1,00,000
Add: Opening Cash and Cash Equivalents 3,00,000
Closing Cash and Cash Equivalents 4,00,000

Working Note:

Fixed Assets Account
Dr. Cr.
Particulars J.F. Amount

(₹)

 Particulars J.F. Amount

(₹)
Balance b/d 5,00,000 Depreciation 80,000
Purchases (Balancing Figure) 2,80,000 Balance c/d 7,00,000
7,80,000 7,80,000
Q10Written answer

From the following balance sheet of Yogeta Ltd., prepare the cash flow statement.

Particulars Note No. 31st March
2017
(₹)		 31st March
2016
(₹)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital 1 4,00,000 2,00,000
b) Reserves and surplus-Surplus 2,00,000 1,00,000
2. Non-current Liabilities
a) Long-term borrowings 2 1,50,000 2,20,000
3. Current Liabilities
a) Short-term borrowings 1,00,000 –
(Bank overdraft)
b) Trade payables 70,000 50,000
c) Short-term provision 50,000 30,000
(Provision for taxation)
Total 9,70,000 6,00,000
II) Assets
1. Non-current assets
a) Fixed assets
i) Tangible 7,00,000 4,00,000
2. Current assets
a) Inventories 1,70,000 1,00,000
b) Trade Receivables 1,00,000 50,000
c) Cash and cash equivalents – 50,000
Total  9,70,000 6,00,000
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Worked solution

Notes to Accounts

Particulars 31st March
2017
(₹)		 31st March
2016
(₹)
1. Share capital
a) Equity share capital 3,00,000 2,00,000
b) Preference share capital 1,00,000 –
4,00,000 2,00,000
2. Long-term borrowings
Long-term loan – 2,00,000
Long-term Rahul 1,50,000 20,000
1,50,000 2,20,000

Additional Information:
Net Profit for the year after charging ₹ 50,000 as depreciation was ₹ 1,50,000. The dividend paid on shares was ₹ 50,000, Tax Provision created during the year amounted to ₹ 60,000.

The solution to this question is as follows:

Cash Flow Statement of Yogeta Ltd.
Particulars Amount

₹

 Amount

₹
A. Cash Flow from Operating Activities
Profit as per Balance Sheet (2,00,000 –1,00,000) 1,00,000
Proposed Dividend 50,000
Provision for Taxation 60,000
Net Profit before Taxation and Extraordinary items 2,10,000
Items to be added:
Depreciation 50,000 50,000
Operating Profit before Working Capital changes 2,60,000
Add: Increase in Current liabilities
Trade Payable 20,000 20,000
2,80,000
Less: Increase in Current Assets
Inventories (70,000)
Trade Receivable (50,000) (1,20,000)
Cash Generated from Operating Activities 1,60,000
Less: Income Tax paid (40,000)
Net Cash from Operations 1,20,000
B. Cash Flow from Investing Activities
Purchases of Fixed Assets (3,50,000)
Net Cash used in Investing Activities (3,50,000)
C. Cash Flow from Financing Activities
Issue of Equity Shares 1,00,000
Issue of Preference Shares 1,00,000
Loan from Rahul 1,30,000
Less: Repayment of Loan (2,00,000)
Dividend Paid (50,000)
Net Cash from Financing Activities 80,000
D. Net decrease in Cash and Cash Equivalent (A+B+C) (1,50,000)
Add: Cash and Cash Equivalents in the beginning 50,000
E. Cash and Cash Equivalents at the end (Bank Overdraft) (1,00,000)

Working Notes:

1.

Provision for Taxation Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Bank (Balancing figure) 40,000 Balance b/d 30,000
Balance c/d 50,000 Profit and Loss 60,000
90,000 90,000

2.

Fixed Assets Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Balance b/d 4,00,000 Depreciation 50,000
Bank 3,50,000 Balance c/d 7,00,000
7,50,000 7,50,000