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

Q11Written answer

Following is the financial statement of Garima Ltd. Prepare the cash flow statement.


Particulars	Note No.	31^st March 2017 (₹)	31^st March 2016 (₹)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital	1	4,40,000	2,80,000
b) Reserve and surplus-Surplus	2	40,000	28,000
2. Current Liabilities
a) Trade payables		1,56,000	56,000
c) Short-term provisions		12,000	4,000
(Provision for taxation)
Total		6,48,000	3,68,000
II) Assets
1. Non-current assets
a) Fixed assets
i) Tangible		3,64,000	2,00,000
2. Current assets
a) Inventories		1,60,000	60,000
b) Trade receivables		80,000	20,000
c) Cash and cash equivalents		28,000	80,000
d) Other current assets		16,000	8,000
Total		6,48,000	3,68,000

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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	1,40,000	80,000
	4,40,000	2,80,000
2. Reserve and surplus
Surplus in statement of profit and loss at the beginning of the year	28,000
Add: Profit of the year	16,000
Less: Dividend	4,000
Profit at the end of the year	40,000

Additional Information:

The solution to this question is as follows:

Cash Flow Statement (Indirect Method)
	Particulars	Amount ₹	Amount ₹
A.	Cash Flow from Operating Activities
	Profit as per Balance Sheet (40,000 – 28,000)	12,000
	Proposed Dividend	4,000
	Provision for Taxation	12,000
	Net Profit before Taxation and Extraordinary items		28,000
	Items to be added:
	Interest paid on Debentures	600
	Depreciation	32,000	32,600
	Operating Profit before Working Capital changes		60,600
	Add: Increase in Current liabilities
	Trade Payables	1,00,000
	Less: Increase in Current Assets
	Other Current Assets	(8,000)
	Inventories	(1,00,000)
	Trade Receivables	(60,000)	(68,000)
	Cash generated from Operating Activities		(7,400)

	Less: Income Tax paid		(4,000)
	Net Cash used in Operating Activities		(11,400)

B.	Cash Flow from Investing Activities
	Purchase of Fixed Assets		(1,96,000)
	Net Cash used in Investing Activities		(1,96,000)

C.	Cash Flow from Investing Activities
	Issue of Equity Shares		1,00,000
	Issue of Preference Shares		60,000
	Less: Interest Paid on Debentures		(600)
	Less: Dividend Paid		(4,000)
	Net Cash from Financing Activities		1,55,400

D.	Net decrease in cash and cash equivalent (A+B+C)		(52,000)
	Add: Cash and Cash Equivalents in the beginning		80,000
E.	Cash and Cash Equivalents at the end		28,000

Working Notes:

Plant and Machinery Account
Dr.							Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
	Balance b/d		2,00,000		Depreciation		32,000
	Bank (Purchases- Balancing fig.)		1,96,000		Balance c/d		3,64,000
			3,96,000				3,96,000

Q12Written answer

From the following balance sheet of Computer India Ltd., prepare a cash flow statement.

(₹ in ‘000)
Particulars	Note No.	31^st March 2017 (₹)	31^st March 2016 (₹)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital		50,000	40,000
b) Reserves and surplus-Surplus	1	3,700	3,000
2. Non-Current Liabilities
10% Debentures		6,500	6,000
3. Current Liabilities
a) Short-term borrowings	2	6,800	12,500
b) Trade payables		11,000	12,000
c) Short-term provisions	3	10,000	8,000
Total		88,000	81,500
II) Assets
1. Non-current assets
a) Fixed assets	4	25,000	30,000
2. Current assets
a) Inventories		35,000	30,000
b) Trade receivables		24,000	20,000
c) Cash and cash equivalents-cash		3,500	1,200
d) Other current assets-prepaid exp.		500	300
Total		88,000	81,500

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Worked solution

Notes to Accounts

	Particulars	31^st March 2017 (₹)	31^st March2016(₹)
1.	Reserve and surplus
	(i) Balance in the statement of profit and loss	1,200	1,000
	(ii) General reserve	2,500	2,000
		3,700	3,000
2.	Short-term borrowings
	Bank Overdraft	6,800	12,500

3.	Short-term provisions
	(i) Provision for taxation	4,200	3,000
	(ii) Proposed dividend	5,800	5,000
		10,000	8,000
4.	Fixed Assets:
	Fixed Assets	40,000	41,000
	Less: Accumulated Depreciation	(15,000)	(11,000)
		25,000	30,000

Additional Information:

Interest paid on Debenture ₹ 600

The solution to this question is as follows:

Cash Flow Statement of Computer India Ltd.
				(‘00,000)
	Particulars			Amount ₹	Amount ₹
A.	Cash Flow from Operating Activities
	Profit as per Balance Sheet (1,200 – 1,000)			200
	Proposed Dividend			5,800
	General Reserve			500
	Provision for Taxation			4,200
	Net Profit before Tax and Extraordinary items				10,700
	Items to be added
		Provision for Depreciation		4,000
		Interest paid on Debentures		600	4,600
	Operating Profit before Working Capital changes				15,300
	Adjustments
		Less:	Increase in Current Assets
			Trade Receivables	(4,000)
			Inventories	(5,000)
			Prepaid Expenses	(200)	(9,200)
					6,100
		Less:	Decrease in Current Liabilities
			Trade Creditors	(1,000)	(1,000)
	Cash generated from Operating Activities				5,100
		Less:	Income Tax Paid		(3,000)
	Net Cash from Operation				2,100

B.	Cash Flow from Investing Activities
		Sale of Fixed Assets			1,000
	Net Cash from Investing Activities				1,000

C.	Cash Flow from Financing Activities
		Issue of Equity Shares			10,000
		Issue of 10% Debentures			500
		Less:	Dividend paid		(5,000)
		Less:	Interest paid		(600)
	Net Cash from Financing Activities				4,900

D.	Net Increase in Cash and Cash Equivalent (A+B+C)				8,000
		Add:	Cash and Cash Equivalent in the beginning
			Cash	1,200
			Bank Overdraft	(12,500)	(11,300)

E.	Cash and Cash Equivalents at the end
			Cash	3,500
			Bank Overdraft	(6,800)	(3,300)

The concepts covered in this chapter are listed below:

Conclusion

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