CLASS XII ACCOUNTANCY

CASH FLOW
STATEMENTS 1
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

CASH FLOW STATEMENT

NOTE 1: MEANING
A Cash Flow Statement is a statement showing inflows (receipts) and outflows (payments) of
cash during a particular period. It analyses the reasons for changes in balance of cash between the
two balance sheet dates.
It helps to ascertain the sources, applications and the net change in Cash & Cash
Equivalents.

NOTE 2: IMPORTANCE /USES Of CASH FLOW STATEMENT

1) Useful for Short-Term Planning
2) Useful in Preparing the Cash Budget
3) Comparison with the Cash Budget
4) Study of Trend of Cash Receipts and Payments
5) It explains the Deviations of Cash from Earnings
6) Helpful in ascertaining Cash Flow from Various Activities Separately
7) Useful to Prospective Investors

NOTE 3: LIMITATIONS OF CASH FLOW STATEMENT

1) Possibility of Window Dressing
2) Ignores non-cash transactions
3) Ignores the Accrual Concept of Accounting
4) Historical in Nature

NOTE 4: DIFFERENCE BETWEEN CASH FLOW STATEMENT AND

CASH BUDGET
i) Cash Flow Statement is prepared for a past period whereas a cash budget is prepared for a
future period.
ii) Cash Flow Statement is a part of Financial Statements as per the Companies Act,2013
whereas there is no such requirement for Cash Budget.
iii) Cash Flow Statement is prepared as per Accounting Standard-3(Revised) whereas there is
no such Accounting Standard for Cash Budget.
iv) There is specific format for Cash Flow Statement whereas there is no specific format for
Cash Budget.
v) Cash Flow Statement is prepared for the financial Accounting Period where as Cash Budget
can be prepared for month, quarter, half yearly or Annual.

NOTE 5: MEANING OF CASH & CASH EQUIVALENTS

Cash and Cash Equivalents include the following:
i) Cash in Hand
ii) Cash at Bank
iii) Current Investments
iv) Short Term Investments or Marketable Securities
v) Cheques
vi) Drafts on Hand

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 2
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

NOTE 6: FORMAT OF CASH FLOW STATEMENT

A cash flow statement may be prepared either by direct or indirect method. Format under
indirect method is given below:
XYZ Ltd.
CASH FLOW STATEMENT for the year ended ________
(Indirect Method)
{as per Accounting Standard – 3 (Revised)}
PARTICULARS AMOUNT AMOUNT
(Rs) (Rs)
A. CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit before Tax (See Note 1) XX
ADJUSTMENTS FOR NON CASH AND NON OPERATING ITEMS
Add: Non Cash and Non Operating Expenses
i) Depreciation XX
ii) Preliminary Expenses written off XX
iii) Discount on issue of Shares and Debentures written off XX
iv) Goodwill, Patents and Trademarks Amortised XX
v) Interest on long-term Borrowings XX
vi)Loss on sale of fixed Assets XX XX
Less: Non Operating Income XX
i)Interest Income (XX)
ii)Dividend Income (XX)
iii) Rental Income (XX)
iv)Profit on Sale of Fixed Assets (XX) (XX)
Operating Profit before Working capital Changes XX
ADJUSTMENTS FOR WORKING CAPITAL CHANGES
Add: Decrease in Current Assets/Increase in Current Liabilities
i) XX
ii) XX
iii) XX
Less: Increase in Current Assets/Decrease in Current Liabilities
i) (XX)
ii) (XX)
iii) (XX) XX
Operating Profit after Working Capital Changes XX
Less: Income Tax paid (XX)
Net cash inflow/outflow from Operating Activities (A) XXX

B. Cash flow from Investing activities:

Add: Proceeds from sale of Tangible fixed Assets XX
Add: Proceeds From sale of intangible Fixed Assets like Goodwill XX
Add: Proceeds From sale of Non-current investment XX
Add: Interest and Dividend Received XX
Add: Rent Received XX
Less: Purchase of Tangible Fixed Assets (XX)
Less: Purchase of Intangible Fixed Assets like goodwill (XX)
Less: Purchase of Non-Current Investments (XX)
Net cash inflow/outflow from Investing Activities (B) XXX

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 3
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

C. Cash flow from Financing Activities:

Add: Proceeds from issue of Shares and Debenture XX
Add: Proceeds from Other Long-term Borrowings XX
Less: Final Dividend Paid (XX)
Less: Interim Dividend Paid (XX)
Less: Interest on Long-term Borrowings paid (XX)
Less: Repayment of Loans (XX)
Less: Redemption of Debentures (XX)
Net cash inflow/outflow from financing activities (C) XXX

Net Increase (or Decrease) in Cash & Cash Equivalents (A+B+C) XXX
Add: Cash and Cash Equivalents in the beginning of the year XXX
Cash and Cash Equivalents at the end of the year XXX

Working Note 1:
PARTICULARS AMOUNT
(Rs)
Net Profit for the Current Year (after Appropriations) i.e., Difference in P&L Balance XX
Add: Transfer to Reserves XX
Proposed Dividend of Previous Year XX
Interim Dividend Paid During the Year XX
Provision for Tax made during the Current Year XX
Net Profit Before Tax XXX

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 4
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Self-Note 1: For understanding Operating Activities

TRADING AND PROFIT & LOSS ACCOUNT

PARTICULARS AMOUNT PARTICULARS AMOUNT

To Opening Stock 10000 By Direct Income 120000
To Purchases 30000
To Wages 5000 Direct
To Direct Expenses 5000 Method
To Gross Profit c/d 100000 By Closing Stock 30000
150000 150000

To Salaries 5000 By Gross Profit b/d 100000

To Printing & Stationery 5000 By Other Operating Incomes 40000
To Other Operating Expenses 10000 (Commission Received)
To Operating Cash Profit c/d 120000
140000 140000

To Other Operating Non Cash Exp 20000 By Operating Cash Profit b/d 120000
(Depreciation, Goodwill w/off) 10000
To Operating Profit c/d 90000
120000 120000

To Non-Operating Expenses By Operating Profit b/d 90000

(Dividend Paid, Loss on Sale 20000 By Non-operating income 40000
of Fixed Assets etc) 30000 (Profit on sale of Assets)
To Net Profit c/d 80000
130000 130000
Indirect
Method

PROFIT & LOSS APPROPRIATION

PARTICULARS AMOUNT PARTICULARS AMOUNT

To Transfer to Reserve 10000 By Net Profit b/d 80000

To Proposed Dividend 15000
To Interim Dividend 2500
To Provision for Tax 2500
To Net Profit Transferred to B/S 50000
80000 80000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 5
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Self-Note 2: Working Format for Cash Flow Statement

Books of_______________________
CASH FLOW STATEMENT for the year ended ________
{as per Accounting Standard – 3 (Revised)}
PARTICULARS AMOUNT AMOUNT
(Rs) (Rs)
A. CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit before Tax (See Note 1)
ADJUSTMENTS FOR NON CASH AND NON OPERATING ITEMS
Add: Non Cash and Non Operating Expenses

Less: Non Operating Income

Operating Profit before Working capital Changes

ADJUSTMENTS FOR WORKING CAPITAL CHANGES
Add: Decrease in Current Assets/Increase in Current Liabilities
i)
ii)
iii)
Less: Increase in Current Assets/Decrease in Current Liabilities
i)
ii)
iii)
Operating Profit after Working capital Changes
Less: Income Tax paid
Net cash inflow/outflow from Operating Activities (A)

B. CASH FLOW FROM INVESTING ACTIVITIES

Net cash inflow/outflow from Investing Activities (B)

C. CASH FLOW FROM FINANCING ACTIVITIES

Net cash inflow/outflow from financing activities (C)

Net Increase (or Decrease) in Cash & Cash Equivalents (A+B+C)

Add: Cash and Cash Equivalents in the beginning of the year
Cash and Cash Equivalents at the end of the year

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 6
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Working Note 1:
PARTICULARS AMOUNT
(Rs)
Net Profit for the Current Year (after Appropriations) i.e., Difference in P&L Balance
Add: Transfer to Reserves
Proposed Dividend of Previous Year
Interim Dividend Paid During the Year
Provision for Tax made during the Current Year
Net Profit Before Tax

NOTE 7: SMALL HURDLES WHICH MAY CREEP INTO

i) Always see which column is Current Year and Previous Year.

ii) Bank Overdraft and Cash Credit

Will be considered as Financing Activity as per CBSE Guidelines.

iii) Provision for Doubtful Debts

Add as Non Cash expenses in Operating.

iv)Goodwill
Increase in Goodwill is Goodwill Purchased, So Less in Investing .
Decrease in Goodwill is Goodwill written off , So Add as Non Cash expenses in Operating.

v) Fixed Assets (other than Land)

When increased than consider it to be purchased. So Less in Investing.
When decreased than consider depreciation. So Add as Non Cash expenses in Operating.
If Additional Info given than prepare Ledger.
(If in Balance Sheet, Accumulated Depreciation Ledger is there then prepare Accumulated
Depreciation Ledger also, otherwise don’t prepare.)

vi) Land
When increased than consider it to be purchased. So Less in Investing.
When decreased than consider it to be Sale. So Add in Investing.

vii)Interest Rate prefixed with any type of borrowings or Investments is to be considered as hidden
adjustment.

viii) While calculating the interest amount consider the period for which the fund is used (i.e.,
consider when it is issued/taken/repaid/redeemed). If clear cut dates not mentioned then consider
as 6 month and give note of assumption.

ix)Provision For Taxation

Otherwise mentioned:
Current Year Provision is considered to be Provision Made During the year So Add with
Difference in P/L.
Previous Year Provision is Tax paid during the year. So Less as Tax Paid in Operating.
If additional info given i.e., if Tax Paid given then find Provision for Tax Made During the Year
and if Tax Made during the Year Given then Find Tax paid during the year by preparing ledger.

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 7
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

x)Proposed Dividend
It is a Conitngent Liability and
Previous Year’s figure is to be added in WN -1and Less in Financing(If Dividend payable is
there in Current Liability then substract that amount and write in Financing)
Current Year’s Figure will have no Effect .

xi)Interim Dividend
Will be added in WN -1 and Less in Financing.

xii) Preference Dividend

If Final or Interim Dividend (Obviously to the Equity Shareholders) has been paid then it is
understood that previous year’s dividend on Preference Shares has also been paid as we know that
Pref Dividend is paid before dividend on Equity Shares.
Preference Dividend is calculated on Last Year’s Preference Share Capital Balance.
Necessary adjustment (Less in Financing and Add in WN-1) is to be made even though it
may not be mentioned in the Additional Information.
If no information is there for Equity dividend then Preference Dividend can be ignored but do
give the note.

xiii)Security Premium Reserve

This is created when the securities are issued so to be added with that security in Financing.

xiv)Bonus Shares
These are issued to existing equity shareholders without charging any amount from them.
Hence, Bonus shares are not shown in Cash flow Statement because there is no flow of cash.

xv)Interest Received/Paid by a Financing Companies

Since receiving interest and paying interest is part of operation for the Financing Companies,
it will not be treated in Investing and Financing unless specifically mentioned.

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 8
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

QUESTION BANK
LEVEL – I
Question: 1
Following is the Balance Sheet of Ram & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 3,20,000 2,50,000
b) Reserves & Surplus 23,000 10,000
2)Current Liabilities
Trade Payables 45,000 70,000
TOTAL 3,88,000 3,30,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 66,000 50,000
b)Non Current Investments 62,000 40,000
2) Current Assets
a)Current Investments 8,000 10,000
b)Inventory 90,000 80,000
c)Trade Receivables 1,15,000 1,20,000
d)Cash & Cash Equivalents 47,000 30,000
TOTAL 3,88,000 3,30,000

Ans: i) Operating Activities (Rs17,000)

ii) Investing Activities (Rs38,000)
iii) Financing Activities Rs 70,000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 9
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 2
Following is the Balance Sheet of Laxman & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 2,50,000 2,00,000
b) Reserves & Surplus 1 1,83,000 82,000
2)Non Current Liabilities
Long Term Borrowings 2 80,000 50,000
3)Current Liabilities
Trade Payables 1,62,000 1,30,000
TOTAL 6,75,000 4,62,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 2,74,000 1,17,000
b)Non Current Investments 68,000 55,000
2) Current Assets
a)Inventory 2,06,000 1,50,000
b)Trade Receivables 3 32,000 70,000
c)Cash & Cash Equivalents 95,000 70,000
TOTAL 6,75,000 4,62,000

NOTES TO ACCOUNTS
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Reserves & Surplus
Profit & Loss Balance 1,83,000 82,000
2 Long Term Borrowings
15% Debentures 80,000 50,000
3 Trade Receivables
Sundry Debtors 20,000 60,000
Bills Receivables 12,000 10,000
32,000 70,000

ADDITIONAL INFORMATION:
Interest paid on Debentures amounted to Rs9,000

Ans: i) Operating Activities Rs1,24,000

ii) Investing Activities (Rs1,70,000)
iii) Financing Activities Rs 71,000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 10
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 3
Following is the Balance Sheet of Sita & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 1 2,90,000 2,50,000
b) Reserves & Surplus 1,52,000 50,000
2)Current Liabilities
a)Trade Payables 5,000 23,000
b)Short Term Provision 2 35,000 27,000
TOTAL 4,82,000 3,50,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets
i)Tangible Assets 3 1,50,000 1,40,000
ii) Intangible Assets 20,000 30,000
2) Current Assets
a)Inventory 95,000 45,000
b)Trade Receivables 2,00,000 1,20,000
c)Cash & Cash Equivalents 17,000 15,000
TOTAL 4,82,000 3,50,000

NOTES TO ACCOUNTS
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Share Capital
Equity Share Capital 2,50,000 2,00,000
Preference Share Capital 40,000 50,000
2,90,000 2,50,000
2 Short Term Provision
Provision For Tax 35,000 27,000
3 Tangible Assets
Building 80,000 1,00,000
Plant 70,000 40,000
1,50,000 1,40,000

ADDITIONAL INFORMATION:
i)Depreciation Charged on Plant was Rs30,000 and on Building Rs50,000
ii)Income Tax Paid during the year amounted to Rs25,000

Ans: i) Operating Activities Rs52,000

ii) Investing Activities (Rs90,000)
iii) Financing Activities Rs 40,000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 11
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

LEVEL – II
Question: 4
Following is the Balance Sheet of Radha & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 2,00,000 2,00,000
b) Reserves & Surplus 1,25,000 20,000
2)Non Current Liabilities
Long Term Borrowings 75,000 50,000
3)Current Liabilities
Trade Payables 64,000 90,000
Short Term Provision (Prov for Tax) 15,000 10,000
TOTAL 4,79,000 3,70,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 1 3,23,000 1,84,000
2) Current Assets
a)Inventory 72,000 50,000
b)Trade Receivables 51,000 75,000
c)Other Current Assets 2 - 2,000
d)Cash & Cash Equivalents 33,000 59,000
TOTAL 4,79,000 3,70,000

NOTES TO ACCOUNTS
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Fixed Assets 3,75,000 2,20,000
Less: Accumulated Depreciation 52,000 36,000
3,23,000 1,84,000
2 Other Current Assets
Prepaid Expenses - 2,000

ADDITIONAL INFORMATION:
1) Contingent Liability
Proposed Dividend 28,000 20,000

2) Interest paid on Long Term Borrowings amounted to Rs8,000

Ans: i) Operating Activities Rs1,32,000

ii) Investing Activities (Rs1,55,000)
iii) Financing Activities (Rs3,000)

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 12
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 5
Following is the Balance Sheet of Krishna & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 1,50,000 1,20,000
b) Reserves & Surplus 1,78,000 75,000
2)Non Current Liabilities
Long Term Borrowings 1 - 50,000
3)Current Liabilities
Trade Payables 31,500 67,000
Short Term Provision (Prov for Tax) 42,000 30,000
TOTAL 4,01,500 3,42,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 2 2,08,000 1,40,000
b)Intangible Assets 3 35,000 20,000
2) Current Assets
a)Inventory 1,05,000 1,20,000
b)Trade Receivables 33,500 37,000
c)Cash & Cash Equivalents 20,000 25,000
TOTAL 4,01,500 3,42,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Long Term Borrowings:
15% Debentures - 50,000

2 Tangible Assets:
Building 80,000 1,00,000
Plant & Machinery 1,28,000 40,000
2,08,000 1,40,000
3 Intangible Assets
Goodwill 35,000 20,000

ADDITIONAL INFORMATION:
1) Contingent Liability
Proposed Dividend 15,000 12,000
2) Depreciation of Rs10,000 was provided on Plant & Machinery.
3) Gain on sale of a part of Building Rs25,000
4) Debentures were redeemed on 1st April, 2018
5)Provision for Tax made during the Year Rs50,000

Ans: i) Operating Activities Rs95,000

ii) Investing Activities (Rs68,000)
iii) Financing Activities (Rs32,000)

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 13
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 6
Following is the Balance Sheet of Balaram & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 2,00,000 2,00,000
b) Reserves & Surplus 1 84,000 (8,000)
2)Non Current Liabilities
Long Term Borrowings 2 1,35,000 1,00,000
3)Current Liabilities
Trade Payables 68,000 62,000
TOTAL 4,87,000 3,54,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 3 1,20,000 1,30,000
2) Current Assets
a)Inventory 61,000 80,000
b)Trade Receivables 40,000 29,000
c) Current Investments (Marketable Sec) 22,000 15,000
d)Cash & Cash Equivalents 2,44,000 1,00,000
TOTAL 4,87,000 3,54,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Reserves & Surplus:
General Reserve 24,000 -
Profit & Loss Balance 60,000 (8,000)
84,000 (8,000)
2 Long Term Borrowings:
12% Mortgage Loan 1,35,000 1,00,000

3 Tangible Assets:
Machinery 1,45,000 1,60,000
Less : Accumulated Depreciation 25,000 30,000
1,20,000 1,30,000

ADDITIONAL INFORMATION:
1) Interest Paid on Mortgage Loan Amounted to Rs14,100
2) Interim Dividend Paid During the Year Rs20,000.
3) Machinery Costing Rs40,000 (accumulated Depreciation thereon being Rs18,000) was sold
for Rs5,000

Ans: i) Operating Activities Rs1,70,100

ii) Investing Activities (Rs20,000)
iii) Financing Activities Rs900

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 14
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

LEVEL – III
Question: 7
Following is the Balance Sheet of Brahma & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 3,00,000 2,00,000
b) Reserves & Surplus 1 65,000 50,000
2)Current Liabilities
Trade Payables 2 1,05,000 52,000
Other Current Liabilities 3 - 16,000
Short Term Provision 4 20,000 2,000
TOTAL 4,90,000 3,20,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 2,25,000 1,10,000
b) Non-Current investments 55,000 60,000
2) Current Assets
a)Inventory 26,000 50,000
b)Trade Receivables 1,80,000 92,000
c)Cash & Cash Equivalents 4,000 8,000
TOTAL 4,90,000 3,20,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Reserves & Surplus:
Securities Premium Reserve 20,000 -
Profit & Loss Balance 45,000 50,000
65,000 50,000
2 Trade Payables:
Sundry Creditors 95,000 52,000
Bills Payable 10,000 ---------
1,05,000 52,000
3 Other Current Liabilities:
Outstanding Salaries ---------- 16,000

4 Short Term Provision

Provision for Doubtful Debts 20,000 2,000

ADDITIONAL INFORMATION:
1) During the year, a company sold 60% of its original Non-Current Invt at a profit of 25%.
2) Depreciation provided during the year was Rs35,000.

Ans: i) Operating Activities Rs12,000

ii) Investing Activities (Rs1,36,000)
iii) Financing Activities Rs1,20,000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 15
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 8
Following is the Balance Sheet of Vishnu & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 14,00,000 12,00,000
b) Reserves & Surplus 1 7,40,000 5,80,000
2)Current Liabilities
Trade Payables 2,72,000 2,10,000
TOTAL 24,12,000 19,90,000

II. ASSETS
1) Non – Current Assets
Fixed Assets 12,00,000 8,00,000
2) Current Assets
a)Inventory 3,10,000 2,00,000
b)Trade Receivables 5,80,000 5,00,000
c)Cash & Cash Equivalents 3,22,000 4,90,000
TOTAL 24,12,000 19,90,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Reserves & Surplus:
General Reserve 4,50,000 4,00,000
Profit & Loss Balance 2,90,000 1,80,000
7,40,000 5,80,000

ADDITIONAL INFORMATION:
1) Contingent Liability
Proposed Dividend 72,000 60,000
2) Depreciation charged during the year on Plant & Machinery amounted to Rs80,000.
3) Machinery costing Rs80,000 (book value Rs30,000) was sold at a loss of 40% on book
value.
Ans: i) Operating Activities Rs1,84,000
ii) Investing Activities (Rs4,92,000)
iii) Financing Activities Rs1,40,000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 16
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 9
Following is the Balance Sheet of Mahesh & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 12,00,000 8,00,000
b) Reserves & Surplus 1 (1,70,000) (2,15,000)
2)Non Current Liabilities
Long Term Borrowings 2 3,00,000 2,50,000
3)Current Liabilities
Trade Payables 1,90,000 2,70,000
TOTAL 15,20,000 11,05,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 6,90,000 5,00,000
b) Non-Current Investments 1,20,000 2,00,000
2) Current Assets
a)Inventory 4,60,000 2,80,000
b)Trade Receivables 3 1,80,000 65,000
c)Cash & Cash Equivalents 70,000 60,000
TOTAL 15,20,000 11,05,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Reserves & Surplus:
Profit & Loss Balance (1,70,000) (2,15,000)

2 Long Term Borrowings:

12% Public Deposits 3,00,000 2,50,000

3 Trade Receivables:
Sundry Debtors 1,80,000 50,000
Bills Receivables ------------ 15,000
1,80,000 65,000

ADDITIONAL INFORMATION:
1) New Public Deposits were accepted on 01st January, 2019.
2) Machinery costing Rs2,00,000 on which depreciation charged was Rs70,000 was sold for
Rs1,50,000
3) New machinery purchased during the year amounted to Rs4,00,000.
4) Non-Current Investments were sold at a profit of 25%.

Ans: i) Operating Activities (Rs2,58,500)

ii) Investing Activities (Rs1,50,000)
iii) Financing Activities Rs4,18,500

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 17
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

LEVEL – IV
Question: 10
Following is the Balance Sheet of Maa Durga & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 1 5,75,000 2,50,000
b) Reserves & Surplus 2 1,40,000 1,70,000
2)Non-Current Liabilities
Long Term Borrowings 3 75,000 1,00,000
TOTAL 7,90,000 5,20,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets 4,50,000 3,00,000
2) Current Assets
a)Inventory 1,50,000 1,00,000
b)Trade Receivables 1,25,000 75,000
c)Cash & Cash Equivalents 65,000 45,000
TOTAL 7,90,000 5,20,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Share Capital
Equity Share Capital 5,00,000 2,00,000
8% Preference Share Capital 75,000 50,000
5,75,000 2,50,000
2 Reserves & Surplus:
General Reserve 1,15,000 45,000
Profit & Loss Balance 25,000 1,25,000
1,40,000 1,70,000
3 Long Term Borrowings:
10% Debentures 75,000 1,00,000
75,000 1,00,000

ADDITIONAL INFORMATION:
1) During the year, a machine costing Rs70,000 was sold for Rs15,000.
2) Interim Dividend Paid on Equity share Capital Rs24,000.

Ans: i) Operating Activities (Rs38,250)

ii) Investing Activities (Rs2,05,000)
iii) Financing Activities Rs2,63,250

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 18
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 11
Following is the Balance Sheet of Maa Kali & Co. for two years. Prepare Cash Flow Statement.
PARTICULARS NOTE 31.03.2019 31.03.2018
NO. (Rs) (Rs)
I. EQUITY AND LIABILITIES
1)Shareholder’s Fund
a)Share Capital 3,00,000 2,50,000
b) Reserves & Surplus 1 2,07,000 1,75,000
2)Current Liabilities
a)Short-Term Borrowings (Bank O/D) 20,000 15,000
b)Trade Payables 31,000 54,000
c)Short-Term Provision 2 84,000 81,000
TOTAL 6,42,000 5,75,000

II. ASSETS
1) Non – Current Assets
a)Fixed Assets
i) Tangible Assets 3 2,70,000 2,70,000
ii) Intangible Assets 50,000 30,000
b)Non-Current Investments 45,000 50,000
2) Current Assets
a)Trade Receivables 2,67,000 2,19,000
b)Cash & Cash Equivalents 10,000 6,000
TOTAL 6,42,000 5,75,000

NOTES TO ACCOUNTS:
NOTE PARTICULARS 31.03.2019 31.03.2018
NO. (Rs) (Rs)
1 Reserves & Surplus:
Securities Premium Reserve 10,000 ----------
Profit & Loss Balance 1,97,000 1,75,000
2,07,000 1,75,000
2 Short Term Provision:
Provision for Tax 62,000 65,000
Provision for Doubtful Debts 22,000 16,000
84,000 81,000
3 Tangible Assets:
Land 1,50,000 70,000
Machinery 1,20,000 2,00,000
2,70,000 2,70,000

ADDITIONAL INFORMATION:
1) Machinery whose original cost was Rs1,00,000 (accumulated depreciation thereon being
Rs40,000) was sold for Rs18,000 during the year.
2) Interim Dividend paid during the year Rs25,000.
3) During the year company sold 40% of its original non-current investments at a loss of 20%.
Ans: i) Operating Activities Rs45,000
ii) Investing Activities (Rs81,000)
iii) Financing Activities Rs,40,000

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 CLASS XII ACCOUNTANCY
CASH FLOW
STATEMENTS 19
By CS Chandan Gupta
BCOM(St. Xavier’s Calcutta),B.Ed, MCOM, MA (Eco), PGDIBO, NET, Company Secretaries, CA (Finalist)

Question: 12
Following is the Balance Sheet of M/S Shiksha Ent. for two years. Prepare Cash Flow Statement.
PARTICULARS 31.03.2018 31.03.2019 PARTICULARS 31.03.2018 31.03.2019
(Rs) (Rs) (Rs) (Rs)
Shiksha’s Capital 2,40,000 3,00,000 Fixed Assets 2,00,000 1,60,000
Creditors 44,000 55,000 Inventory 70,000 55,000
Bills Payable 7,000 10,000 Trade Receivables 30,000 1,20,000
Outstanding Salaries 20,000 ------- Prepaid Expenses 16,000 10,000
Bank Overdraft 5,000 ------- Bank Balance ------ 20,000
3,16,000 3,65,000 3,16,000 3,65,000

ADDITIONAL INFORMATION:
1) There was neither any drawings nor any capital addition during the year.
2) There was no purchase/sale fixed Assets

Ans: i) Operating Activities Rs25,000

ii) Investing Activities Nil
iii) Financing Activities (Rs5000)

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