Practice Paper Series 1
Cash Flow Statement
Marks- 20
Question :1. Accounts of Sharp Ltd. shows that balance of Cash and Cash Equivalents has been
increased by ₹ 39,800 as compared to last year. If Cash Flow Statement reveals net cash flow
from financing activities is ₹ 59,200 and cash used in investing activities is ₹ 2,75,000.
Compute Cash Flow from Operating Activities. 2
Question :2.The Balance Sheet reported of Max Ltd. had Equipment Account having opening balance
of ₹ 4,00,000 and closing balance of ₹ 3,75,000. The Statement of Profit and Loss showed
depreciation of ₹ 25,000 and Gain on the Sale of Equipment of ₹ 18,000. The cash flow statement
showed Equipment acquisitions of ₹ 32,000.
Compute Cash Flow from Investing Activities. 2
Question :3. From the following information, calculate Net Profit before Tax and Extraordinary
Items:
Surplus, i.e., Balance in Statement of Profit and Loss (Opening) ₹ 2,32,000
Surplus, i.e., Balance in Statement of Profit and Loss (Closing) ₹ 6,72,000
Dividend Proposed in the current year ₹ 1,44,000
Interim Dividend Paid during the year ₹ 1,86,000
Transfer to General Reserve ₹ 2,20,000
Provision for Tax for the current year ₹ 1,35,000
Refund of Tax ₹ 16,000
Loss of Inventory due to earthquake ₹ 2,73,000
Insurance Claim Received against Earthquake disaster settlement ₹ 2,18,000
Annual Depreciation ₹ 4,38,000
Gain (Profit) on sale of furniture ₹1,90,000 3
Question : 4. From the Following Information Calculate Cash Flow from Investing Activities:
3
Particulars 31st March 2021 31st March 2020
Investment in Shares of Plutonic Ltd. 11,00,000 6,50,000
Goodwill 22,35,000 20,00,000
15% Long term Investment 9,20,000 12,00,000
Patents 3,75,000 5,35,000
Plant and Machinery 5,80,000 3,20,000
Additional Information:
1. 11% Dividend was received from Plutonic Ltd.
2. Plant costing ₹ 78,000 (accumulated depreciation till date of sale ₹32,000) were sold for ₹50,000.
Depreciation Charged during the year was ₹ 32,000.
Question : 5. The following information pertains to Shakti Ltd.:
Surplus, i.e., Balance in Statement of Profit and Loss (31st March, 2021) ₹ 30,00,000
Surplus, i.e., Balance in Statement of Profit and Loss (31st March, 2020) ₹ 15,00,000
Depreciation on Fixed Assets ₹ 2,72,000
Gain (Profit) on sale of furniture ₹ 1,86,000
Interim Dividend Paid during the year ₹ 1,80,000
Transfer to General Reserve ₹ 2,00,000
Patents Amortised ₹ 2,28,000
Rent Received ₹ 5,62,000
Current Assets and Current Liabilities of the business as at 31st March, 2020 and 2021 are as follows:
31.03.2020 31.03.2021
Particulars
₹ ₹
Trade receivables 1,86,000 2,98,000
Prepaid expenses 85,000 1,15,000
Provision for tax 2,50,000 2,95,000
Trade Payables 3,59,000 3,94,000
Inventories 3,80,000 2,75,000
Calculate Cash Flow from Operating Activities. 5
Question :6. From the following Balance Sheet of Foreribs Ltd. as at 31st March, 2021, prepare its
Cash Flow Statement:
Particulars Note No. 31.03.2021 31.03.2020
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 10,00,000 7,00,000
(b) Reserves and Surplus 1 2,50,000 1,50,000
2. Non-Current Liabilities
Long-term Borrowings (10% Debentures) 6,00,000 4,50,000
3. Current Liabilities
(a) Trade Payables 1,08,000 1,76,000
(b) Short Term Provisions 2 50,000 40,000
TOTAL 20,08,000 15,16,000
II. ASSETS:
1. Non-Current Assets
Property, Plant and Equipment (Fixed Assets)
(i) Tangible Assets 3 8,00,000 5,00,000
(ii) Intangible Assets (Goodwill) 2,20,000 2,50,000
2. Current Assets
(a) Inventories 2,80,000 1,75,000
(b) Trade Receivables 3,08,000 2,76,000
(c) Cash and Cash Equivalents 4,00,000 3,15,000
TOTAL 20,08,000 15,16,000
Notes to Accounts
1. Reserves and Surplus
General Reserve 1,15,000 90,000
Surplus, i.e., Balance in Statement of Profit and Loss 1,35,000 60,000
2,50,000 1,50,000
2.Short Term Provisions
Provision for Tax 50,000 40,000
3.Tangible Assets
Plant and Machinery 8,00,000 5,00,000
Additional Information:
1. Debentures were issued on 1st April, 2020.
2. Depreciation charged on Plant and Machinery during the year was ₹ 70,000. 5
