SAMPLE PAPER 1
CASH FLOW
STATEMENT
Time: 3 hours
General Instructions:1. All questions are compulsory.
2. Marks are indicated against the questions.
3. Work should be neat and clean.
4. Overwriting be penalized.
Maxi Mark 80
Q1. Why cash flow statements are called historical in nature.
1
Q2 .State effect of payment of dividend on flow of cash.
1
Q3. Give one example of operation activity for a financial enterprise.
1
Q4. Sale of marketable securities at par would result in inflow, outflow of cash. Give your
answer with reason.
1
Q5 .When is interest received considered as an investing activity?
1
Q6. Redemption of debentures would result in inflow, outflow or no flow of cash? Give your
answer with reason.
1
Q7. Profit made during the year 2008-09 by Bata Ltd. Was Rs. 2, 50,000 (after charging
deprecation on fixed assets Rs. (20,000).state cash flow from operating activities.
1
Q8.In a non- financial enterprise cash receipts from customers is Rs.2, 00,000 and cash paid to
suppliers and employees is Rs. 15,000. State the amount of cash flows from operating activity1
Q9. Give the meaning of cash flow statement?
3
Q10. Explain the limitation of cash flow statement?
3
Q11. What are two major inflows and two major outflows of cash from investing activities?3
Q12. Classify the following into cash flows from investing activities/ financing activities while
preparing a cash flow statement:
3
(a)
Redemption of preference shares
(b)
Sale of fixed assets
(c)
Receipt of dividend
Q13.Calculate the cash flow from the given information:
(i)
4
Investments at the beginning of the period Rs.
40,000 (ii)
Investments at the end of the period
Rs. 30,000
(iii) During the year company had sold 30% of its investments held in the beginning
of the period at a profit of Rs. 6,000.
Q14. Classify the following into operating, investing and financing activities.
(a)
Issue of Share Rs. 2,00,000
(b)
Receipt of interest on Investment by a manufacturing Co. Rs.
4
5,000 (c)
Sale of Goods Rs. 5,00,000
(d) Receipt of interest on investment by a bank.
Q15.classiy following into cash flows from investing activities/financing activities while preparing a
cash flow statements:
4
a. Redemption of debentures
b. Sale of fixed assets
c. Receipt of dividend
d. Interest received
Q16. Classify the following into cash flows from investing activities/financing activities while
preparing cash flow statement:
4
a. Fixed assets purchased
b. Dividend Paid
c. Interest paid
d. Redemption of preference shares
Q.17. From the3 following information calculate cash from operating activities:
4
Opening cash balance
Rs. 10000
Closing cash balance
Rs. 12000
Decreasing debtors
Rs. 5000
Increase in creditors
Rs. 7000
Net profit of the year
Rs. 20000
Q18. X Ltd. made a profit of Rs. 1,00,000 after charging Depreciation of Rs. 20,000 on assets
and a transfer to General Reserve of Rs. 30,000 The goodwill written off was Rs. 7,000 and the
gain on sale of Machinery was Rs. 3,000. The other information available to you (changes in the
value of Current Assets & Current Liabilities) is as follows:
6
At the end of the year Debtors showed an increase of Rs. 6,000, Creditors an increase of Ps
10,000, Prepaid Expenses an Increase of Rs. 200; Bills Receivable a Decrease of Rs. 3000; Bills
Payable a Decrease of Rs. 4,000 and Outstanding Expenses a Decrease of Rs. 2,000. Ascertain
the cash flow from the operating activitIes.
Q19. The following balances appeared in Plant Account and Accumulated Depre- ciation
Account In the books of Bharat Ltd:
6
Balances as a
Plant
Ancumulated Depreciation
31.3.2003
Rs.
7,50,000
1,80,000
31.3.2004
Rs.
9,70,000
2,40,000
Addition Information:
Plant costing Rs. 1,45000; accumulated depreciation thereon Rs. 70,000, was sold for Rs.
35,000.
You are required to:
a) Compute the amount of Plant purchased, depreciation charged for the year and loss on sale of
plant.
b) Show how each of the Items related to the plant will be shown in the cash flow statement.
Q20. . From the following statement calculate the cash generated from operating activities: 6
Liabilities
Rs. Assets
To Salaries
To Rent
To Depreciation
To Loss on Sale of
Building
To Goodwill written off
To Proposed Dividend
To Provision for Tax
To Net Profit
15,000
7,000
25,000
6,000
10,000
10,000
5,000
25,000
1, 03,000
Rs.
By Gross Profit
By Profit on Sale of
Machinery
By Dividend
Received
85,000
12,000
6,000
______
1,03,000
Q21. From the following balance sheet of Mohan Ltd. Prepare cash flow statement:
Liabilities
2006
Equity share capital
2,00,000
3,00,000 Fixed assets
4,00,000 6,00,000
Profit & Loss
1,60,000
2,00,000 Stock
1,30,000 1,50,000
Bank loan
1,00,000
Acc. Depreciation
Creditor
Proposed dividend
80,000
1,40,000
2007
Assets
2006
6
80,000 Debtors
2007
1,00,000
60,000
1,00,000 Bills Receivable
20,000
30,000
1,20,000 bank
90,000
30,000
60,000
70,000
7,40,000
8,70,000
7,40,000 8,70,000
Q22. Calculate ‘cash Flows from operating activities’ from the following information: 8
Particulars
Debtors
Prepaid Expenses
Accrued Income
Income Received in Advance
Creditors
Bills payable
Outstanding Expenses
2003 Rs.
42,000
2,000
1,500
800
26,000
13,000
8,000
2004 Rs.
46,000
2,700
1,200
1,000
28,000
11,000
6,000
Profit made during 2004 amounted to Rs. 1,00,000 after taking into account the following
adjustments:
Rs.
(i) Profit on Sale of Investment
(ii) Loss on Sale of Machine
(iii) Goodwill Amortized
(iv) Depreciation Charged
2,000
900
3,000
2,900
Q23. Calculate net-cash flows from operating activities from the following in formation: 8
Rs.
50,000
10,000
20,000
5,000
10,000
10,000
Profits made during 1996
Transfer to General Reserve
Depreciation provided
Profit on sale of furniture
Loss on sale of machine
Preliminary expenses written off
Additional Information:
Debtors
Bills Receivable
Stock
Prepaid Expenses
Creditors
Bills Payable
Outstanding Expenses
1995 Rs.
10,000
7,000
15,000
2,000
20,000
15,000
3,000
1996 Rs.
15,000
5,000
18,000
3,000
18,000
25,000
4,000
SAMPLE PAPER 2
CASH FLOW
STATEMENT
Time: 3 hours
General Instructions:1. All questions are compulsory.
2. Marks are indicated against the questions.
3. Work should be neat and clean.
4. Overwriting be penalized.
Maxi Mark 80
Q1. Give the two examples of cash equivalents.
1
Q2.What is cash flow statement?
1
Q3.what is meant by “extraordinary items”?
1
Q4. Mutual Fund Company receives a dividend of Rs.25lakhs on its investments in other
company’s shares. Why is it a cash inflow from operating activities for this company? 1
Q5. How will you treat bank overdraft in cash flow statement?
1
Q6. Interest received by a finance company is classified under which kind of activity while
preparing a cash flow statement?
1
Q7. ABC Ltd. made profit of Rs.2, 60,000 before considering depreciation on machinery Rs.
10,000 and loss on sale of furniture Rs. 25,000. State the amount to be shown as cash flows from
operating activities.
1
Q8. DPR Ltd made profit of Rs. 2, 50,000 after considering depreciation on fixed assets Rs.
30,000 and profit on sale of building Rs. 20,000 .State the amount to be shown as cash flow from
operating activities.
1
Q9. What is meant by the term cash and cash equivalents?
3
Q10.How are the various activities classified according to AS-3(Revised) while preparing the
cash flow statement?
3
Q11.PRD Ltd engaged in the business of retailing of two wheelers invested RS. 50,00,000 in the
shares of a manufacturing company. State with reason whether the dividend received on this
investment will be cash flow from operating activities or investing activities.
3
Q12. (Investing activities) Slim Ltd. provided the following information;
3
a. Machinery was purchased for Rs. 60,000
b. A part of machinery, having book value Rs.2,000 was sold for Rs5,000
c. An equipment costing Rs.10,000 has been condemned and scrapped. calculate cash flows from
investing activities .
Q13. Q.19 From the3 following information calculate cash from operating activities:
4
Opening cash balance
Rs. 20000
Closing cash balance
Rs. 24000
Decreasing debtors
Rs. 10000
Increase in creditors
Rs. 14000
Net profit of the year
Rs. 40000
Q14. Briefly explain the objectives of preparing the cash flow statement.
4
Q15. Give a list of items which result in reduction of cash.
4
Q16. Give the treatment of dividend in case of (a) Financial enterprises and (b) Other than
financial enterprises
4
Q17. PQR Ltd. Had the following balances
4
Investment at the end of 2002
Rs. 40000
Investment at the end of 2003
Rs. 33200
During the year the company had sold 25% of its investment at the profit of Rs. 9000.
Calculate cash from operating activities and investing activities if the company has earned a profit
Rs. 20000 during the year.
Q18. The following balances appeared in Machinery Account and Accumulated Depreciation
Account in the books of Jai Bharat Ltd:
6
Balances as at
Machinery Account
Accumulated Depreciation Account
31.3.2003
Rs.
17,78,985
3,40,795
31.3.2004
Rs.
26,55,450
4,75,690
Additional Information:
Machinery costing Rs. 2,65,000 on which accumulated depreciation was Rs. 1,00,000, was sold
for Rs. 75,000.
You are required to:
a) Compute the amount of machinery purchased, depreciation charged for the year and loss on
sale of machinery.
b) How shall each of the items related to machinery be shown in the Cash Flow Statement?
Q19. From the following statement calculate the cash generated from operating activities: 6
Statement of profit for the year ending March 31st, 2005
Particulars
To Salaries
To Rent
To Depreciation
To Loss on Sale of
Building
To Goodwill Written off
To Proposed Dividend
To Provision for Tax
To Net Profit
Rs. Particulars
10,000
5,000
20,000
5,000
8,000
10,000
15,000
_24,000
97,000
By Gross Profit
By Profit on Sale of
Machinery
By Dividend Received
By Commission Accrued
Rs.
85,000
5,000
3,000
4,000
_____
97,000
Q20. From the following statement, calculate the cash generated from operating activities:
Statement of profit for the year ending March 31st 2007
Particulars
Salaries
Amounts
Particulars
Amounts
10,000 Gross profit
Rent
6
85,000
5,000 Profit on sale of Machinery
Depreciation
20,000 Dividend Received
Loss on sale of Building
5,000 Commission Accrued
Goodwill written off
8,000
Proposed dividend
10,000
Provision for tax
15,000
Net profit
24,000
5,000
3,000
4,000
Q21. X Ltd made a profit of Rs.1,00,000 after charging depreciation of Rs.20,000 on assets and
a transfer to General Reserve of Rs.30,000 . The goodwill written off was Rs.7,000
6
And the gain on sale of Machinery was Rs.3, 000 .The other information available to you
(change in the value of Current Assets and Current Liabilities) is as follows:
At the end of the year, Debtors showed an increase of Rs.6,000 : creditors an increases of
Rs. 10,000; prepaid expenses an increase of Rs. 200; bills payable a decrease of Rs4,000
and outstanding expense a decrease or Rs.2,000.
Ascertain the cash flow from the operating activities.
Q22. On March 31st, 2003 Ramesh and Co. indicated a profit of Rs. 1,25,000, after considering
the following:
8
Depreciation on buildings
Depreciation on plant and machinery
Amortization of goodwill
Gain on sale of machinery
Rs.
25,000
45,000
20,000
10,000
The current assets and current liabilities at the beginning and the end of the year are:
Accounts Receivable
Stock on hand
Cash in hand
1-4-2002
Rs.
35,000
75,000
18,000
31-2-2003
Rs.
45,000
69,000
30,000
Accounts payable
Expenses payable
Bank overdraft
30,000
10,000
60,000
32,000
5,000
35,000
Ascertain the net cash (cash flow) from operating activities.
Q23. From following Balance Sheet of Harshit Ltd. And the additional information given, make
out a cash Flow Statement:
8
Liabilities
2007
2008
Assets
2007
2008
Equity share capital
3,00,000
4,00,000 Goodwill
1,15,000
Pref. share capital
1,50,000
1,00,000 Land and Building
2,00,000 1,70,000
90,000
General Reserve
40,000
70,000 Plant
Profit and loss A/c
30,000
48,000 Debtors
Proposed dividend
42,000
50,000 Stock
77,000 1,09,000
Creditors
55,000
83,000 Bills Receivable
20,000
30,000
Bills payable
20,000
16,000 Cash in hand
15,000
10,000
Prov.for taxation
40,000
50,000 Cash at Bank
10,000
8,000
6,77,000
8,17,000
80,000 2,00,000
1,60,000 2,00,000
6,77,000 8,17,000
Additional Information
Depreciation of Rs. 10,000 and Rs.20,000 have been charged on plant account and land and
building account respectively in 2007-08
An interim dividend of Rs. 20,000 has been paid in 2007-08
Income tax Rs. 35,000 was paid during the year 2007-08.
SAMPLE PAPER 3
CASH FLOW
STATEMENT
Time: 3 hours
General Instructions:1. All questions are compulsory.
2. Marks are indicated against the questions.
3. Work should be neat and clean.
4. Overwriting be penalized.
Maxi Mark 80
Q1.state whether purchase of furniture by issue of debentures will result in inflow, or no flow of
cash.
1
Q2.what is meant by extraordinary activities.
1
Q3. What is meant by investing activities?
1
Q4. What is meant by financing activities?
1
Q5.state why non cash transactions are ignored while preparing a cash flow statement? 1
Q6.Under which type of activity will you classify ‘cash received from debtor’ while preparing
cash flow statement?
1
Q7Cash paid as salaries to workers’ would result in inflow, outflow or no flow of cash? Give
your answer with reason.
1
Q8. State with reason whether the issue of 9% debentures to the vendors for the purchase of
machinery of Rs. 50,000 will result in inflow, outflow or no flow of cash?
1
Q9.what is the preparing objective of cash flow statement.
3
Q10.Classify the following into cash flows from investing activities \financing activities while
preparing a cash flow statement;
3
a. Fixed assets purchased
b. Dividend paid
c. Cash received from issue of equity shares
d. Net cash received from sale of investment.
Q11.Classify the following into cash flows from investing activities/financing activities while
preparing a cash flow statement;
3
(a)
Redemption of preference shares
(b)
Sales of fixed assets
(c)
Receipt of dividend
(d)
Interest Received
Q12 .State two objective of preparing a cash flow statement?
3
Q.13. From the following information calculate cash from investing activities and financing
activities:
4
Opening cash balance
Rs. 20000
Closing cash balance
Rs. 25000
Decreasing debtors
Rs. 8000
Increase in creditors
Rs. 10000
Sale of fixed assets
Rs. 50000
Redemption of debentures
Rs. 22000
Dividend paid
Rs. 68000
Net profit of the year
Rs. 27000
Q14. Explain the main features of cash flow statement.
4
Q15. Fine garments pvt. ltd. provided the following information;
4
a. Machinery was purchased for Rs. 120,000
b. A part of machinery, having book value Rs.4,000 was sold for Rs10,000
c. An equipment costing Rs.20,000 has been condemned and scrapped. calculate cash flows from
investing activities .
Q16. Classify with reasons the following into cash flows from investing activities/ financing
activities while preparing a cash flow statement:
4
(a)
Long term borrowings
(b)
Sale of fixed assets
(c)
Profit on sale of fixed assets
(d)
Loss on sale of fixed assets
Q17. Explin briefly managerial uses of statement of changes in financial position on cash basis.
4
Q18. From the following summarised Balance Sheets of a company calculate cash flow from
operating activities
6
Liabilities
2004 Rs.
2005 Rs. Assets
2004 Rs
2005 Rs.
Creditors
Bills Payable
Other Current
Liabilities
Share Capita;
Profit & Loss A/c
30,000
30,000
50,000
1,00,000
_80,000
2,90,000
35,000
35,000
55,000
1,20,000
1,00,000
3,45,000
30,000
50,000
40,000
40,000
1,30,000
2,90,000
40,000
40,000
55,000
50,000
1,60,000
3,45,000
Cash
Investments
Stock
Debtors
Fixed Assets
Q19. The following balances appeared in Plant Account and Accumulated Depreciation
Account in the Books of Bharat Ltd.
6
Balances as at
Plant
31 .3.2007
31.3.2008
7, 50,000
9, 70,000
Accumulated depreciation 1, 80,000
2, 40,000’
Additional Information
Plant costing Rs. 1,45,000 : accumulated depreciation thereon 70,000, was sold for Rs.
35,000.
You are required to
•
Compute the amount plant purchased , depreciation charged for the year and loss on
sale of plant
•
Show how each of the item related to the plant will be shown in the cash flow
statement
Q20.
Prepare cash flow statement of Rose Ltd from the following information for the year
ended March 31, 2008
Particulars
6
31.3.2007
31.3.2008
Investment
1,80,000
2,40,000
Fixed Assets(at cost)
2,10,000
4,00,000
Equity share capital
10,00,000
14,00,000
8,00,000
4,45,000
64,000
44,000
Long term loan
Cash
Additional Information
•
Cash flow from the operating activities after tax and extraordinary items Rs. 3,80,000
•
Depreciation on fixed assets Rs. 85,000
•
Interest received Rs. 45,000
•
Dividend paid during the year Rs. 1,60,000
Q21. The following is the position of current assets and current liabilities of vijay Ltd.
Particulars
31.3.2007
31.3.2008
Creditors
20000
15000
Debtors
30000
20000
Bills receivables
18000
29000
Prepaid insurance
2000
5000
6
The company incurred a loss of Rs. 6000 during the year. Calculate cash from operating
activities.
Q22. Raj Ltd. had a profit of Rs. 17,50,000 for the year ended 31.3.2006 after considering the
following :
8
Rs. 1,30,000
Depreciation on building
Depreciation on plant and machinery
Rs. 40,000
Goodwill written off
Rs. 25,000
Loss on sale of machinery
Rs. 9,000
Following was the position of current assets and current liabilities of the company as on 31.3.
2005 and 31.3.2006.
31.3.2005 Rs.
31.3.2006 Rs.
Stock
70,000
87,000
Bills Receivable
67,000
58,000
Cash
60,000
75,000
Creditors
68,000
77,000
7,000
4,000
43,000
29,000
Outstanding Salary
Bills Payable
Calculate cash flow from operating activities.
Q23. With the help of the following Profit and Loss Account for the year ended 31.3.2006 and
Balance Sheets as on 31.3.2005 and 31.3.2006 of Janta Ltd., calculate cash flow from operating
activities :
8
Profit and Loss Account of Janta Ltd. for the year ended 31.3.2006
Debit
Credit
Particulars
Depreciation 0
Salary
Rent
Commission
Other Expenses
Net Profit
Amount Rs. Particulars
Amount Rs.
Gross Profit
5,00,000
17,000
35,000
72,000
23,000
3,10,000
5,00,000
5,00,000
Proposed Dividend
1,50,000 Net Profit
3,10,000
Retained Profit
1,60,000
3,10,000
3,10,000
Balance Sheets of Janta Ltd. as on 31.3.2005 and 31.3.2006
Liabilities
2005 Rs.
2006 Rs. Assets
Share Capital
2,00,000
3,50,000
2005 Rs.
2006 Rs.
Reserves
60,000
2,20,000
Loan
20,000
30,000
Patents
Proposed Dividend
20,000
1,70,000 Stock
Creditors
1,80,000
10,000 Debtors
Bills Payable
1,70,000
20,000
6,50,000
8,00,000
— 50,000
1,05,000
1,20,000
70,000
90,000
6,50,000
8,00,000
QUESTION BANK
CASH FLOW STATEMENT
ONE MARKS QUESTIONS
Q1.state whether purchase of furniture by issue of debentures will result in inflow, or no flow of
cash.
Q2.what is meant by extraordinary activities.
Q3. What is meant by investing activities?
Q4. What is meant by financing activities?
Q5.state why non cash transactions are ignored while preparing a cash flow statement?
Q6.Under which type of activity will you classify ‘cash received from debtor’ while preparing
cash flow statement?
Q7Cash paid as salaries to workers’ would result in inflow, outflow or no flow of cash? Give
your answer with reason.
Q8. State with reason whether the issue of 9% debentures to the vendors for the purchase of
machinery of Rs. 50,000 will result in inflow, outflow or no flow of cash?
Q9. Give the two examples of cash equivalents.
Q10.What is cash flow statement?
Q11.what is meant by “extraordinary items”?
Q12. Mutual Fund Company receives a dividend of Rs.25lakhs on its investments in other
company’s shares. Why is it a cash inflow from operating activities for this company?
Q13. How will you treat bank overdraft in cash flow statement?
Q14. Interest received by a finance company is classified under which kind of activity while
preparing a cash flow statement?
Q15. ABC Ltd. made profit of Rs.2, 60,000 before considering depreciation on machinery Rs.
10,000 and loss on sale of furniture Rs. 25,000. State the amount to be shown as cash flows from
operating activities.
Q16. DPR Ltd made profit of Rs. 2, 50,000 after considering depreciation on fixed assets Rs.
30,000 and profit on sale of building Rs. 20,000 .State the amount to be shown as cash flow from
operating activities.
Q17. Why cash flow statements are called historical in
Q18 .State effect of payment of dividend on flow of cash.
nature.
Q19. Give one example of operation activity for a financial enterprise.
Q20. Sale of marketable securities at par would result in inflow, outflow of cash. Give your
answer with reason.
Q21 .When is interest received considered as an investing activity?
Q22. Redemption of debentures would result in inflow, outflow or no flow of cash? Give your
answer with reason.
Q23. Profit made during the year 2008-09 by Bata Ltd. Was Rs.
2, 50,000 (after charging deprecation on fixed assets Rs. (20,000).state cash flow from operating
activities.
Q24.In a non- financial enterprise cash receipts from customers is Rs.2, 00,000 and cash paid to
suppliers and employees is Rs. 15,000. State the amount of cash flows from operating activity.
THREE AND FOUR MARKS QUESTIONS
Q1. What is meant by the term cash and cash equivalents?
Q2.How are the various activities classified according to AS-3(Revised) while preparing the cash
flow statement?
Q3.PRD Ltd engaged in the business of retailing of two wheelers invested RS. 50,00,000 in the
shares of a manufacturing company. State with reason whether the dividend received on this
investment will be cash flow from operating activities or investing activities.
Q4. (Investing activities) Slim Ltd. provided the following information;
a. Machinery was purchased for Rs. 60,000
b. A part of machinery, having book value Rs.2,000 was sold for Rs5,000
c. An equipment costing Rs.10,000 has been condemned and scrapped. calculate cash flows from
investing activities .
Q5. From the3 following information calculate cash from operating activities:
Opening cash balance
Rs. 20000
Closing cash balance
Rs. 24000
Decreasing debtors
Rs. 10000
Increase in creditors
Rs. 14000
Net profit of the year
Rs. 40000
Q6. Briefly explain the objectives of preparing the cash flow statement.
Q7. Give a list of items which result in reduction of cash.
Q8. Give the treatment of dividend in case of (a) Financial enterprises and (b) Other than financial
enterprises
Q9. PQR Ltd. Had the following balances
Investment at the end of 2002
Rs. 40000
Investment at the end of 2003
Rs. 33200
During the year the company had sold 25% of its investment at the profit of Rs. 9000.
Calculate cash from operating activities and investing activities if the company has earned a profit
Rs. 20000 during the year.
Q10.what is the preparing objective of cash flow statement.
Q11.Classify the following into cash flows from investing activities \financing activities while
preparing a cash flow statement;
a. Fixed assets purchased
b. Dividend paid
c. Cash received from issue of equity shares
d. Net cash received from sale of investment.
Q12.Classify the following into cash flows from investing activities/financing activities while
preparing a cash flow statement;
(e)
Redemption of preference shares
(f)
Sales of fixed assets
(g)
Receipt of dividend
(h)
Interest Received
Q13 .State two objective of preparing a cash flow statement?
Q.14. From the following information calculate cash from investing activities and financing
activities:
Opening cash balance
Rs. 20000
Closing cash balance
Rs. 25000
Decreasing debtors
Rs. 8000
Increase in creditors
Rs. 10000
Sale of fixed assets
Rs. 50000
Redemption of debentures
Rs. 22000
Dividend paid
Rs. 68000
Net profit of the year
Rs. 27000
Q15. Explain the main features of cash flow statement.
Q16. Fine garments pvt. ltd. provided the following information;
a. Machinery was purchased for Rs. 120,000
b. A part of machinery, having book value Rs.4,000 was sold for Rs10,000
c. An equipment costing Rs.20,000 has been condemned and scrapped. calculate cash flows from
investing activities .
Q17. Classify with reasons the following into cash flows from investing activities/ financing
activities while preparing a cash flow statement:
(e)
Long term borrowings
(f)
Sale of fixed assets
(g)
Profit on sale of fixed assets
(h)
Loss on sale of fixed assets
Q18. Explin briefly managerial uses of statement of changes in financial position on cash basis.
Q19. Give the meaning of cash flow statement?
Q20. Explain the limitation of cash flow statement?
Q21. What are two major inflows and two major outflows of cash from investing activities?
Q22. Classify the following into cash flows from investing activities/ financing activities while
preparing a cash flow statement:
(d)
Redemption of preference shares
(e)
Sale of fixed assets
(f)
Receipt of dividend
Q23.Calculate the cash flow from the given information:
(i)
Investments at the beginning of the period Rs.
40,000 (ii)
Investments at the end of the period
Rs. 30,000
(iii)
During the year company had sold 30% of its investments held in the beginning
of the period at a profit of Rs. 6,000.
Q24. Classify the following into operating, investing and financing
activities. (a)
(b)
Receipt of interest on Investment by a manufacturing Co. Rs.
5,000 (c)
(d)
Issue of Share Rs. 2,00,000
Sale of Goods Rs. 5,00,000
Receipt of interest on investment by a bank.
Q25.classiy following into cash flows from investing activities/financing activities while preparing a
cash flow statements:
e. Redemption of debentures
f. Sale of fixed assets
g. Receipt of dividend
h. Interest received
Q26. Classify the following into cash flows from investing activities/financing activities while
preparing cash flow statement:
e. Fixed assets purchased
f. Dividend Paid
g. Interest paid
h. Redemption of preference shares
Q.27. From the3 following information calculate cash from operating activities:
Opening cash balance
Rs. 10000
Closing cash balance
Rs. 12000
Decreasing debtors
Rs. 5000
Increase in creditors
Rs. 7000
Net profit of the year
Rs. 20000
SIX AND EIGHT MARKS QUESTIONS
Q1. From the following summarised Balance Sheets of a company calculate cash flow
from operating activities
Liabilities
2004 Rs.
2005 Rs. Assets
2004 Rs
2005 Rs.
Creditors
30,000
35,000 Cash
30,000
40,000
Bills Payable
30,000
35,000 Investments
50,000
40,000
Other Current
50,000
55,000 Stock
40,000
55,000
40,000
50,000
Liabilities
1,00,000
1,20,000 Debtors
Share Capita;
_80,000
1,00,000 Fixed Assets
1,30,000
1,60,000
Profit & Loss A/c
2,90,000
3,45,000
2,90,000
3,45,000
Q2. The following balances appeared in Plant Account and Accumulated Depreciation
Account in the Books of Bharat Ltd.
Balances as at
Plant
31 .3.2007
31.3.2008
7, 50,000
9, 70,000
Accumulated depreciation 1, 80,000
2, 40,000’
Additional Information
Plant costing Rs. 1,45,000 : accumulated depreciation thereon 70,000, was sold for Rs.
35,000.
You are required to
•
Compute the amount plant purchased , depreciation charged for the year and loss on
sale of plant
•
Show how each of the item related to the plant will be shown in the cash flow
statement
Q3.
Prepare cash flow statement of Rose Ltd from the following information for the year ended
March 31, 2008
Particulars
31.3.2007
31.3.2008
Investment
1,80,000
2,40,000
Fixed Assets(at cost)
2,10,000
4,00,000
Equity share capital
10,00,000
14,00,000
8,00,000
4,45,000
64,000
44,000
Long term loan
Cash
Additional Information
•
Cash flow from the operating activities after tax and extraordinary items Rs. 3,80,000
•
Depreciation on fixed assets Rs. 85,000
•
Interest received Rs. 45,000
•
Dividend paid during the year Rs. 1,60,000
Q4. The following is the position of current assets and current liabilities of vijay Ltd.
Particulars
31.3.2007
31.3.2008
Creditors
20000
15000
Debtors
30000
20000
Bills receivables
18000
29000
Prepaid insurance
2000
5000
The company incurred a loss of Rs. 6000 during the year. Calculate cash from operating
activities.
Q5. Raj Ltd. had a profit of Rs. 17,50,000 for the year ended 31.3.2006 after considering the
following :
Depreciation on building
Rs. 1,30,000
Depreciation on plant and machinery
Rs. 40,000
Goodwill written off
Rs. 25,000
Loss on sale of machinery
Rs. 9,000
Following was the position of current assets and current liabilities of the company as on 31.3.
2005 and 31.3.2006.
31.3.2005 Rs.
31.3.2006 Rs.
Stock
70,000
87,000
Bills Receivable
67,000
58,000
Cash
60,000
75,000
Creditors
68,000
77,000
7,000
4,000
43,000
29,000
Outstanding Salary
Bills Payable
Calculate cash flow from operating activities.
Q6. With the help of the following Profit and Loss Account for the year ended 31.3.2006 and
Balance Sheets as on 31.3.2005 and 31.3.2006 of Janta Ltd., calculate cash flow from operating
activities :
Profit and Loss Account of Janta Ltd. for the year ended 31.3.2006
Debit
Particulars
Credit
Amount Rs. Particulars
Amount Rs.
Gross Profit
5,00,000
Depreciation 0
17,000
Salary
35,000
Rent
72,000
Commission
23,000
Other Expenses
3,10,000
Net Profit
5,00,000
5,00,000
Proposed Dividend
1,50,000 Net Profit
3,10,000
Retained Profit
1,60,000
3,10,000
3,10,000
Balance Sheets of Janta Ltd. as on 31.3.2005 and 31.3.2006
Liabilities
2005 Rs.
2006 Rs. Assets
Share Capital
2,00,000
3,50,000
Reserves
60,000
2,20,000
Loan
20,000
30,000
2005 Rs.
Patents
Proposed Dividend
20,000
1,70,000 Stock
Creditors
1,80,000
10,000 Debtors
Bills Payable
1,70,000
20,000
6,50,000
8,00,000
2006 Rs.
— 50,000
1,05,000
1,20,000
70,000
90,000
6,50,000
8,00,000
Q7. The following balances appeared in Machinery Account and Accumulated Depreciation
Account in the books of Jai Bharat Ltd:
Balances as at
Machinery Account
Accumulated Depreciation Account
31.3.2003
31.3.2004
Rs.
Rs.
17,78,985
26,55,450
3,40,795
4,75,690
Additional Information:
Machinery costing Rs. 2,65,000 on which accumulated depreciation was Rs. 1,00,000, was sold
for Rs. 75,000.
You are required to:
a) Compute the amount of machinery purchased, depreciation charged for the year and loss on
sale of machinery.
b) How shall each of the items related to machinery be shown in the Cash Flow Statement?
Q8. From the following statement calculate the cash generated from operating activities:
Statement of profit for the year ending March 31st, 2005
Particulars
Rs. Particulars
To Salaries
10,000 By Gross Profit
To Rent
85,000
5,000 By Profit on Sale of
To Depreciation
5,000
20,000 Machinery
To Loss on Sale of
5,000 By Dividend Received
Building
8,000 By Commission Accrued
To Goodwill Written off
10,000
To Proposed Dividend
15,000
To Provision for Tax
Rs.
3,000
4,000
_24,000
_____
97,000
97,000
To Net Profit
Q9. From the following statement, calculate the cash generated from operating activities:
Statement of profit for the year ending March 31st 2007
Particulars
Salaries
Rent
Depreciation
Amounts
Particulars
10,000 Gross profit
5,000 Profit on sale of Machinery
20,000 Dividend Received
Loss on sale of Building
5,000 Commission Accrued
Goodwill written off
8,000
Proposed dividend
10,000
Provision for tax
15,000
Net profit
24,000
Amounts
85,000
5,000
3,000
4,000
Q10. X Ltd made a profit of Rs.1,00,000 after charging depreciation of Rs.20,000 on assets and
a transfer to General Reserve of Rs.30,000 . The goodwill written off was Rs.7,000
And the gain on sale of Machinery was Rs.3, 000 .The other information available to you
(change in the value of Current Assets and Current Liabilities) is as follows:
At the end of the year, Debtors showed an increase of Rs.6,000 : creditors an increases of Rs.
10,000; prepaid expenses an increase of Rs. 200; bills payable a decrease of Rs4,000 and
outstanding expense a decrease or Rs.2,000.
Ascertain the cash flow from the operating activities.
Q11. On March 31st, 2003 Ramesh and Co. indicated a profit of Rs. 1,25,000, after considering
the following:
Rs.
Depreciation on buildings
25,000
Depreciation on plant and machinery
45,000
Amortization of goodwill
20,000
Gain on sale of machinery
10,000
The current assets and current liabilities at the beginning and the end of the year are:
1-4-2002
31-2-2003
Rs.
Rs.
Accounts Receivable
35,000
45,000
Stock on hand
75,000
69,000
Cash in hand
18,000
30,000
Accounts payable
30,000
32,000
Expenses payable
10,000
5,000
Bank overdraft
60,000
35,000
Ascertain the net cash (cash flow) from operating activities.
Q12. From following Balance Sheet of Harshit Ltd. And the additional information given, make
out a cash Flow Statement:
Liabilities
2007
2008
Assets
2007
2008
Equity share capital
3,00,000
4,00,000 Goodwill
1,15,000
Pref. share capital
1,50,000
1,00,000 Land and Building
2,00,000 1,70,000
90,000
General Reserve
40,000
70,000 Plant
Profit and loss A/c
30,000
48,000 Debtors
Proposed dividend
42,000
50,000 Stock
77,000 1,09,000
Creditors
55,000
83,000 Bills Receivable
20,000
30,000
Bills payable
20,000
16,000 Cash in hand
15,000
10,000
Prov.for taxation
40,000
50,000 Cash at Bank
10,000
8,000
6,77,000
80,000 2,00,000
1,60,000 2,00,000
8,17,000
6,77,000 8,17,000
Additional Information
Depreciation of Rs. 10,000 and Rs.20,000 have been charged on plant account and land and
building account respectively in 2007-08
An interim dividend of Rs. 20,000 has been paid in 2007-08
Income tax Rs. 35,000 was paid during the year 2007-08.
Q13. XYZ Ltd. made a profit of Rs. 2,00,000 after charging Depreciation of Rs. 40,000 on
assets and a transfer to General Reserve of Rs. 60,000 The goodwill written off was Rs. 14,000
and the gain on sale of Machinery was Rs. 6,000. The other information available to you
(changes in the value of Current Assets & Current Liabilities) is as follows:
At the end of the year Debtors showed an increase of Rs. 12,000, Creditors an increase of Ps
20,000, Prepaid Expenses an Increase of Rs. 400; Bills Receivable a Decrease of Rs. 5000; Bills
Payable a Decrease of Rs. 8,000 and Outstanding Expenses a Decrease of Rs. 4,000. Ascertain
the cash flow from the operating activitIes.
Q14. The following balances appeared in Plant Account and Accumulated Depre- ciation
Account In the books of Bharat Ltd:
Balances as a
31.3.2003
31.3.2004
Rs.
Rs.
Plant
7,50,000
9,70,000
Ancumulated Depreciation
1,80,000
2,40,000
Addition Information:
Plant costing Rs. 1,45000; accumulated depreciation thereon Rs. 70,000, was sold for Rs.
35,000.
You are required to:
a) Compute the amount of Plant purchased, depreciation charged for the year and loss on sale of
plant.
b) Show how each of the Items related to the plant will be shown in the cash flow statement.
Q15. . From the following statement calculate the cash generated from operating activities:
Liabilities
To Salaries
To Rent
To Depreciation
To Loss on Sale of
Rs. Assets
15,000 By Gross Profit
7,000 By Profit on Sale of
25,000 Machinery
10,000 Received
To Goodwill written off
10,000
To Proposed Dividend
5,000
To Net Profit
85,000
12,000
6,000
6,000 By Dividend
Building
To Provision for Tax
Rs.
25,000
1, 03,000
______
1,03,000
Q16. From the following balance sheet of Mohan Ltd. Prepare cash flow statement:
Liabilities
2006
Equity share capital
2,00,000
3,00,000 Fixed assets
4,00,000 6,00,000
Profit & Loss
1,60,000
2,00,000 Stock
1,30,000 1,50,000
Bank loan
1,00,000
Acc. Depreciation
Creditor
80,000
1,40,000
Proposed dividend
2007
Assets
2006
80,000 Debtors
2007
1,00,000
60,000
1,00,000 Bills Receivable
20,000
30,000
1,20,000 bank
90,000
30,000
60,000
70,000
7,40,000
8,70,000
7,40,000 8,70,000
Q17. Calculate ‘cash Flows from operating activities’ from the following information:
Particulars
2003 Rs.
2004 Rs.
42,000
46,000
Prepaid Expenses
2,000
2,700
Accrued Income
1,500
1,200
800
1,000
Creditors
26,000
28,000
Bills payable
13,000
11,000
8,000
6,000
Debtors
Income Received in Advance
Outstanding Expenses
Profit made during 2004 amounted to Rs. 1,00,000 after taking into account the following
adjustments:
Rs.
(i) Profit on Sale of Investment
(ii) Loss on Sale of Machine
2,000
900
(iii) Goodwill Amortized
3,000
(iv) Depreciation Charged
2,900
Q18. Calculate net-cash flows from operating activities from the following in formation:
Rs.
Profits made during 1996
50,000
Transfer to General Reserve
10,000
Depreciation provided
20,000
Profit on sale of furniture
5,000
Loss on sale of machine
10,000
Preliminary expenses written off
10,000
Additional Information:
1995 Rs.
1996 Rs.
10,000
15,000
7,000
5,000
15,000
18,000
2,000
3,000
Creditors
20,000
18,000
Bills Payable
15,000
25,000
3,000
4,000
Debtors
Bills Receivable
Stock
Prepaid Expenses
Outstanding Expenses