ACCOUNTING FOR MANAGEMENT

Problems on Cash Flow Statement Analysis

1. From the following details, prepare a cash flow statement.

Balance Sheet

Liabilities 2017 2018 Assets 2017 2018

Share Capital 50,000 50,000 Gross Block 1,00,000 1,40,000

P & L Account 80,000 1,10,000 (-) Depreciation (40,000) (55,000)

Debentures ---- 30,000 60,000 85,000

Creditors 20,000 25,000 Stock 60,000 1,00,000

Bills Payable 20,000 5,000 Debtors 30,000 40,000

Other C.L. 10,000 15,000 Bills Receivable 10,000 ----

Cash 20,000 10,000

1,80,000 2,35,000 1,80,000 2,35,000

2. The summarized Balance Sheet of Kunal Ltd., as on 31-12-2015 and 31-12-2016 are
as follows :

Liabilities 2015 2016 Assets 2015 2016

Share Capital 4,50,000 4,50,000 Fixed Assets 4,00,000 3,20,000
General Reserve 3,00,000 3,10,000 Investments 50,000 60,000
P & L Account 56,000 68,000 Stock 2,40,000 2,10,000
Creditors 1,68,000 1,34,000 Debtors 2,10,000 4,55,000
Tax Provision 75,000 10,000 Bank 1,49,000 1,97,000
Mortgage Loan ---- 2,70,000
10,49,000 12,42,000 10,49,000 12,42,000

Additional Details :
1. Investments costing Rs. 8,000 was sold for Rs. 8,500.
2. Tax provision made during the year was Rs. 9,000.
3. During the year part of the fixed assets costing Rs. 10,000 was sold for Rs. 12,000
and the profit was included in Profit and Loss Account.

You are required to prepare a Cash Flow Statement for 2016.

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3. From the following Balance Sheet of Mr. Dinesh, prepare Cash Flow Statement.

Balance Sheet as on 31 December

Liabilities 2010 2011 Assets 2010 2011

Capital 70,000 58,000 Land and Building 60,000 54,000
Sundry Creditors 10,000 9,000 Plant and Machinery 20,000 15,000
Bills Payable 14,000 12,000 Stock 1,000 1,200
Outstanding 1,000 1,000 Debtors 7,000 4,500
Expenses
Cash 1,000 800
Bills Receivable 6,000 4,500
95,000 80,000 95,000 80,000

Other Information :
1. There was neither any drawings nor capital addition.
2. There was neither any sale nor any purchase of land and building and plant and
machinery.

4.
From the following details, prepare a Cash Flow Statement.

Balance Sheets

Liabilities 2017 2018 Assets 2017 2018

Share Capital 10,000 15,000 Land 4,000 4,000

P % L Account 5,000 8,000 Machinery 3,000 5,000

General Reserve 4,000 6,000 Stock 10,000 12,000

Creditors 8,000 12,000 Debtors 10,000 15,000

Bills Payable 5,000 3,000 Cash 5,000 8,000

Total 32,000 44,000 Total 32,000 44,000

Additional Information :

During the year depreciation charged on Machinery for Rs. 1,000 and Dividend paid Rs.
2,000.
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5.
From the following information prepare a Cash Flow Statement.

Liabilities 2018 2019 Assets 2018 2019

Capital 15,00,000 16,00,000 Goodwill 4,00,000 3,00,000

Reserves 1,00,000 1,20,000 Machinery 10,00,000 11,00,000

Debentures 4,00,000 2,80,000 Furniture 4,00,000 6,00,000

Bank Loan 1,00,000 ---- Stock 3,00,000 1,00,000

Current Liabilities 50,000 60,000 Debtors 50,000 1,00,000

Provision for Tax 50,000 1,40,000 Cash 50,000 20,000

Provision for Dividend 20,000 20,000 Preliminary 20,000 ----

Expenses
Total 22,20,000 22,20,000 Total 22,20,000 22,20,000

Additional Information :

During the year 2019, depreciation written off on Machinery and Furniture was Rs.
1,00,000 and Rs. 1,50,000 respectively.

6. From the following, calculate Cash from Operating activities during the year 2019.

31 December
2018 2019
Debtors 5,00,000 4,70,000
Bills Receivable 1,00,000 1,25,000
Creditors 2,00,000 2,50,000
Bills Payable 80,000 60,000
Outstanding Expenses 10,000 12,000
Prepaid Expenses 8,000 7,000
Accrued Income 6,000 7,500
Income Received in Advance 3,000 2,500
Profit made during the year 13,00,000
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7. From the figures given below, calculate Cash from Operating activities.

31-12-2019 31-12-2020

Balances of Profit and Loss Account 25,000 1,55,000

Debtors 45,000 42,000

Creditors 20,000 26,000

Bills Receivables 12,000 15,000

Prepaid Expenses 1,600 1,400

Bills Payable 18,000 16,000

Outstanding Expenses 1,200 1,600

Outstanding Income 800 900

Income Received in Advance 250 300

8. The financial position of Ram on 1st January 2017 and 31 December 2017 was as
follows :

Liabilities 1-1-2017 31-12-2017 Assets 1-1-2017 31-12-2017

Creditors 36,000 41,000 Cash 4,000 3,600

Mrs. Ram’s Loan ---- 20,000 Debtors 35,000 38,400

Loan from Bank 30,000 25,000 Stock 25,000 22,000

Capital 1,48,000 1,49,000 Land 20,000 30,000

Building 50,000 55,000

Machinery 80,000 86,000

2,14,000 2,35,000 2,14,000 2,35,000

During the year, the proprietor withdrew Rs. 26,000 for domestic purpose. The
provision for depreciation against Machinery as on 1-1-2017 was Rs. 27,000 and on
31-12-2017 Was Rs. 36,000.
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9. The following details are available from a company.

(Rs. In lakhs)

31-03-2017 31-03-2016

I. EQUITY AND LIABILITIES

Shareholders Funds
Share Capital 74,000 70,000
Reserves and Surplus 10,560 10,040
Non-Current Liabilities
Debentures 6,000 12,000
Current Liabilities
Trade Payable 11,840 10,360
Short Term Provisions 800 700

Total 1,03,200 1,03,100

II. ASSETS
Non-Current Assets
Fixed Assets
Tangible 30,000 20,000
Intangible 5,000 10,000
Current Assets
Inventories 42,700 49,200
Trade Receivable 17,700 14,900
Cash and Cash Equivalent 7,800 9,000

Total 1,03,200 1,03,100

In addition, you are given :

(a) Dividend paid total Rs. 3,500.

(b) Land was purchased for Rs. 10,000. Amount provided for amortization of
goodwill Rs. 5,000.
(c) Debentures paid off Rs. 6,000.

Prepare Cash Flow Statement.

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10. From the following Balance Sheets of X Ltd., prepare a Cash Flow Statement.

Particulars 31-03-2017 31-03-2016

EQUITY AND LIABILITIES
Shareholders Funds
Share Capital 2,00,000 2,00,00
Reserves and Surplus 52,000 23.500
Non-Current Liabilities
Debentures 35,000 40,000
Current Liabilities
Trade Payable 44,500 36,500
Short Term Provisions 3,000 2,000

Total 3,34,500 3,02,000

ASSETS
Non-Current Assets
Fixed Assets 1,14,500 95,000
Non-Current Investments 30,000 50,000
Current Assets
Inventories 40,000 32,000
Trade Receivables 90,000 80,000
Cash and Cash Equivalents 60,000 45,000
Total 3,34,500 3,02,000

Additional Information :
Land & Building Machinery
Original Cost as on 31-03-2016 85,000 25,000
Accumulated Depreciation as on 31-03-2016 12,000 3,000
Original Cost as on 31-03-2017 1,00,000 40,000
Accumulated Depreciation as on 31-03-2017 18,000 7,500

(i) Dividend paid during 2017 was Rs. 26,500.

(ii) Investments costing Rs. 20,000 were sold in 2017 for Rs. 25,000.
(iii) Machinery costing Rs. 5,000 (on which Rs. 1,000 of depreciation had been
accumulated) was sold for Rs. 6,000 in the year 2017.