Cash Flow Statement
ABC ltd. provides you with this Profit and loss account and balance sheet for
the two years. The directors are interested in tracking down the activities
that generate cash inflows during the year ending March 31, 2017. prepare
a cash flow statement based upon the following details:
Balance Sheet
Assets 2017 2018 Liabilities 2017 2018
Fixed assets 4,00,000 5,00,000 Equity 2,50,000 5,00,000
Investments 2,00,000 Nil Preference 50,000 20,000
shares
Machinery 1,50,000 3,00,000 Debentures 1,00,000 40,000
Cash in hand 41,000 2,00,000 Long term Nil 30,000
borrowings
Debtors 30,000 42,000 Net profit 1,20,000 1,39,000
Inventory 22,000 18,000 Reserves and 2,91,000 2,91,000
surplus
Creditors 32,000 40,000
Total 8,43,000 10,60,000 Total 8,43,000 10,60,000
Profit and loss Account
Expenses Amount Revenue Amount
purchases 15,000 sales 85,000
salary and wages 5,000 interest received 15,000
income tax 1,000 dividend income 10,000
debentures interest 6,000
dividend (preference) 3,000
dividend (equity) 6,000
depreciation 55,000
Net profit/RE 19,000
Total 1,10,000 Total 1,10,000
Depreciation is provided @ 10%. New assets, if added, are assumed to be
purchased on the last date of financial year.
Profit and loss Account
Particulars Amount Particulars Amount
purchases 15,000 sales 85,000
salary and wages 5,000 interest received 15,000
income tax 1,000 dividend income 10,000
debentures interest 6,000
dividend (preference) 3,000
dividend (equity) 6,000
depreciation 55,000
Net profit/RE 64000 19,000
Total
Total 1,10,000 1,10,000
Amount Amount
A. Cash flow from operating activities
Net profit before indirect expenses and incomes 19,000
Add: Non cash and Non operating Expenses
Debentures interest 6,000
Dividend (Preference shares) 3,000
Dividend (Equity shares) 6,000
Depreciation 55,000 70,000
Less: Non operating Incomes
Interest received (15,000)
Dividend received (10,000) (25,000)
Net Profit before working capital change 64,000
Balance Sheet and Changes
Change
Assets 2011 2012 Change Liabilities 2011 2012
Fixed assets 4,00,000 5,00,000 1,00,000Equity 2,50,000 5,00,000 2,50,000
Preference
Investments 2,00,000 0 -2,00,000 50,000 20,000 -30,000
shares
Machinery 1,50,000 3,00,000 1,50,000Debentures 1,00,000 40,000 -60,000
Long term
Cash in hand 41,000 2,00,000 1,59,000 0 30,000 30,000
borrowings
Debtors 30,000 42,000 12,000Net profit 1,20,000 1,39,000 19,000
Reserves and
Inventory 22,000 18,000 -4,000 2,91,000 2,91,000 0
surplus
Creditors 32,000 40,000 8000
Total 8,43,000 10,60,000 2,17,000Total 8,43,000 10,60,000 2,17,000
Amount Amount
A. Cash flow from operating activities
Net profit before indirect expenses and incomes 19,000
Add: Non cash and Non operating Expenses
Debentures interest 6,000
Dividend (Preference shares) 3,000
Dividend (Equity shares) 6,000
Depreciation 55,000 70,000
Less: Non operating Incomes
Interest received (15,000)
Dividend received (10,000) (25,000)
Net Profit before working capital change 64,000
Add: Decrease in current assets and Increase in current liabilities
Inventory 4,000
Creditors 8,000 12,000
Less: Increase in current assets and Decrease in current liabilities
Debtors (12,000) (12,000)
Net cash flow from Operating activities 64,000
Balance Sheet and Changes Investing Activities
Change
Assets 2011 2012 Change Liabilities 2011 2012
Fixed assets 4,00,000 5,00,000 1,00,000Equity 2,50,000 5,00,000 2,50,000
Preference
Investments 2,00,000 0 -2,00,000 50,000 20,000 -30,000
shares
Machinery 1,50,000 3,00,000 1,50,000Debentures 1,00,000 40,000 -60,000
Long term
Cash in hand 41,000 2,00,000 1,59,000 0 30,000 30,000
borrowings
Debtors 30,000 42,000 12,000Net profit 1,20,000 1,39,000 19,000
Reserves and
Inventory 22,000 18,000 -4,000 2,91,000 2,91,000 0
surplus
Creditors 32,000 40,000 8000
Total 8,43,000 10,60,000 2,17,000Total 8,43,000 10,60,000 2,17,000
Working note 1 (Fixed assets)
Particulars Amount Particulars Amount
Opening balance 4,00,000 Depreciation @ 10% 40,000
Purchases (Outflow – 1,40,000 Closing balance 5,00,000
Assumed)
tal 5,40,000 tal 5,40,000
Working note 2 (Machinery)
Particulars Amount Particulars Amount
Opening balance 1,50,000 Depreciation @ 10% 15,000
Purchases (Outflow – 1,65,000 Closing balance 3,00,000
Assumed)
Total 3,15,000 Total 3,15,000
Profit and loss Account
Particulars Amount Particulars Amount
purchases 15,000 sales 85,000
salary and wages 5,000 interest received 15,000
income tax 1,000 dividend income 10,000
debentures interest 6,000
dividend (preference) 3,000
dividend (equity) 6,000
depreciation 55,000
Net profit/RE 19,000
64000
Total
Total 1,10,000 1,10,000
Amount Amount
B. Cash flow from investing activities
Inflow:
Dividend received 10,000
Interest received 15,000
Sale of investments 2,00,000 2,25,000
Outflow:
Purchase of Fixed assets (Working note 1) (1,40,000)
Purchase of Machinery (Working note 2) (1,65,000) (3,05,000)
Net cash flow from Investing activities (80,000)
Balance Sheet and Changes – Financing
Change
Assets 2011 2012 Change Liabilities 2011 2012
Fixed assets 4,00,000 5,00,000 1,00,000Equity 2,50,000 5,00,000 2,50,000
Preference
Investments 2,00,000 0 -2,00,000 50,000 20,000 -30,000
shares
Machinery 1,50,000 3,00,000 1,50,000Debentures 1,00,000 40,000 -60,000
Long term
Cash in hand 41,000 2,00,000 1,59,000 0 30,000 30,000
borrowings
Debtors 30,000 42,000 12,000Net profit 1,20,000 1,39,000 19,000
Reserves and
Inventory 22,000 18,000 -4,000 2,91,000 2,91,000 0
surplus
Creditors 32,000 40,000 8000
Total 8,43,000 10,60,000 2,17,000Total 8,43,000 10,60,000 2,17,000
Profit and loss Account
Particulars Amount Particulars Amount
purchases 15,000 sales 85,000
salary and wages 5,000 interest received 15,000
income tax 1,000 dividend income 10,000
debentures interest 6,000
dividend (preference) 3,000
dividend (equity) 6,000
depreciation 55,000
Net profit 19,000
64000
Total
Total 1,10,000 1,10,000
Amount Amount
C. Cash flow from financing activities
Inflow:
Issue of equity shares 2,50,000
Long term borrowing 30,000 2,80,000
Outflow:
Debentures redeemed (60,000)
Preference shares redeemed (30,000)
Debentures Interest (6,000)
Dividend paid (Preference shares) (3,000)
Dividend paid (Equity shares) (6,000) (1,05,000)
Net cash flow from Financing activities 1,75,000
Amount Amount
A. Cash flow from operating activities
Net profit before indirect expenses and incomes 19,000
Add: Non cash and Non operating Expenses
Debentures interest 6,000
Dividend (Preference shares) 3,000
Dividend (Equity shares) 6,000
Depreciation 55,000 70,000
Less: Non operating Incomes
Interest received (15,000)
Dividend received (10,000) (25,000)
Net Profit before working capital change 64,000
Add: Decrease in current assets and Increase in current liabilities
Inventory 4,000
Creditors 8,000 12,000
Less: Increase in current assets and Decrease in current liabilities
Debtors (12,000) (12,000)
Net cash flow from Operating activities (A) 64,000
Amount Amount
B. Cash flow from investing activities
Inflow:
Dividend received 10,000
Interest received 15,000
Sale of investments 2,00,000 2,25,000
Outflow:
Purchase of Fixed assets (Working note 1) (1,40,000)
Purchase of Machinery (Working note 2) (1,65,000) (3,05,000)
Net cash flow from Investing activities (B) (80,000)
Amount Amount
C. Cash flow from financing activities
Inflow:
Issue of equity shares 2,50,000
Long term borrowing 30,000 2,80,000
Outflow:
Debentures redeemed (60,000)
Preference shares redeemed (30,000)
Debentures Interest (6,000)
Dividend paid (Preference shares) (3,000)
Dividend paid (Equity shares) (6,000) (1,05,000)
Net cash flow from Investing activities (C) 1,75,000
Change in Cash (A +B+ C) 159000
Add: Opening Cash Balance 41000
Closing Cash Balance 200000
Profit and loss Account
Particulars Amount Particulars Amount
purchases 15,000 sales 85,000
salary and wages 5,000 interest received 15,000
income tax 1,000 dividend income 10,000
debentures interest 6,000
dividend (preference) 3,000
dividend (equity) 6,000
depreciation 55,000
Net profit 19,000
64000
Total
Total 1,10,000 1,10,000
