I.

Impact of Adjustment for changes in Working Capital

Rs.
Net Profit for the year 2018 10,000
Expenses outstanding on January 01, 2018 2,000
Expenses outstanding as on December 31,2018 3,000
Interest received in advance on 1 January, 2018 1,000
Interest received in advance on December 31,2018 2,000
Compute Cash from Operations using the above data

II. CFO Activities by both Methods

From the following Profit and Loss Account and additional information provided kindly determine the cash flow
from operating activities using the Direct Method as well as the Indirect Method.
Profit and Loss Account for the Year Ended 31st March, 2019
Particulars Rs. Particulars Rs.
To Purchases 1,00,000 By Sales 1,60,000
To Gross Profit 60,000
1,60,000 1,60,000
To Salaries 6,000 By Gross Profit 60,000
To Depreciation 12,000 By Profit on Sale of Land 2,000
To Repairs and Maintenance 6,000
To Insurance Premium 4,000
To Net Profit 34,000
62,000 62,000
Other Information:
(in Rs.)
2018 2019
Debtors 10,000 16,000
Bills Receivable 10,000 6,000
Creditors 16,000 15,000
Outstanding Expenses 2,500 1,500

III. DIRECT METHOD

1. Following information pertaining to Lehra Ltd. was extracted from the accounting records for the year
ended March 31, 2018:

Particulars Amount
(Rs.)
Cash received from customers 8,70,000
Rent received 10,000
Cash paid to suppliers and employees 5,10,000
 Taxes paid 1,10,000
Cash dividend paid 30,000
Compute the Net cash flow provided by operations for 2017-18, if the company reports as per AS-3.

2. The following is the data pertaining to Mc. Dowellson Ltd. for the calendar year 2019.

Cash Receipts: Rs.

Customers 66,00,000
Interest on notes receivable 1,20,000
Sale of investments 2,00,000
Proceeds from issue of debentures 10,00,000
Sale of equipment 4,00,000
Issuance of common stock 20,00,000
Cash Payments:
Purchase of investments 10,00,000
Interest on notes payable 1,80,000
Purchase of equipment 12,00,000
Operating expenses 44,00,000
Repayment of Debentures 15,00,000
Payment of dividends to shareholders 3,00,000
The balance of cash and cash equivalents is Rs.13,00,000 at the beginning of 2009 and Rs.30,40,000 at the
end of 2019
Required:
Prepare a statement of cash flows for 2019 for Mc. Dowellson Ltd. Use the direct method for reporting
operating activities.

IV. INDIRECT METHOD

1) From the following information prepare cash flow statement for the year ended 31.12.2004 by Indirect
Method:
Balance Sheet as at 31st December
2018 2019 2018
2019 Rs.
Rs. Rs. Rs.
Share capital 3,00,000 3,50,000 Land & Buildings 2,20,000 3,00,000
Bank overdraft 3,20,000 2,00,000 Machinery 4,00,000 2,80,000
Bills payable 1,00,000 80,000 Stock 1,00,000 90,000
Creditors 1,80,000 2,50,000 Debtors 1,40,000 1,60000
Cash 40,000 50,000
9,00,000 8,80,000 9,00,000 8,80,000
Additional Information
a. Net profit for the year 2019 amounted to Rs.1,20,000.
b. During the year, a machinery costing Rs.50,000 (accumulated depreciation
Rs.20,000) was sold for Rs.26,000. The provision for depreciation against
Machinery as on 31.12.2018 was Rs.1,00,000 and on 31.12.2019 Rs.1,70,000.
2) The Balance sheet of Reliance Ltd., for the years ended 31st March, 2018 and 2019 were summarized as
under:
Liabilities 2019 2018 Assets 2019 2018
Rs. Rs. Rs. Rs.
Equity share capital 1,80,000 1,50,000 Fixed assets 30,000 30,000
(at WDV)Building
Reserves Fixtures 51,000 33,000
Profit & Loss a/c 15,000 12,000 Vehicles 37,500 24,000
Short-term 6,000 3,000
investments
Current liabilities: Current assets:
Creditors 12,000 7,500 Stock 51,000 42,000
Taxation 4,500 3,000 Debtors 24,000 18,000
Proposed dividends 6,000 3,000 Bank & cash 18,000 25,500
2,17,500 1,75,500 2,17,500 1,75,500
Profit & Loss a/c for the year ended 31.3.2019 is
Particulars Rs.
Profit before tax 13,500
Taxation (4,500)
Profit after tax 9,000
Proposed dividends 6,000
Retained profits 3,000

Further information is available

Rs.
Particulars Fixtures Vehicles
Depreciation for year 3,000 7,500
Disposals:
Proceeds on disposal 5,100
Written down value (3,000)
Profit on disposal 2,100
Prepare a cash flow statement for the year ended 31-3-2019.
 3) Following are comparative balance sheets of AB Ltd. For the year ended December 31,2019.
Prepare a Cash flow statement as per Ind AS
2018 2019 2018
2019 Rs.
Rs. Rs. Rs.
Share capital 205000 265000 Land & Buildings 148500 144250
Reserves 50000 50000 Machinery 112950 116200
P& L a/c 39690 41220 Goodwill - 20000
Bank Loan 59510 - Current Assets 198530 170730
Current liabilities 73280 52660 Cash 7500 7700
Prov for taxation 40000 50000
467480 458880 467480 458880
Additional Information
1. During the year 2019, the company paid tax of Rs.25,000
2. A dividend of Rs.26,000 was paid during the year 2009.
3. Profit before tax for the year is Rs.62,530
4. DURING the year the company purchased machinery for Rs.5,650. It also
acquired Another company (stock Rs.21,640, and machinery Rs.18,360)
and paid Rs.60,000 in Share Capital for the acquisition)

4) You are the Senior Accounts Officer of Little Flower Ltd. The Comparative Balance sheets as on

March 31,2020 and March 31,2021 and the Income Statement for the financial year 2002-03 are

given below.

Little Flower Ltd.

Comparative Balance Sheets
As on March 31, 2021 and March 31, 2020
2021 2020
(Rs.) (Rs.)
Assets:
Cash 2,30,000 75,000
Accounts receivable 2,35,000 2,75,000
Long -term investments 5,75,000 6,35,000
Inventory 7,20,000 5,50,000
Prepaid insurance 5,000 25,000
Land 45,00,000 45,00,000
Plant and equipment 35,75,000 25,25,000
   Less: Accumulated depreciation (5,15,000) (3,40,000)
93,25,000 82,45,000
Liabilities:
Accounts payable 2,50,000 2,15,000
Accrued liabilities 60,000 45,000
Income tax payable 15,000 25,000
Bonds payable 14,75,000 12,25,000
Shareholders' Equity:
Common stock 43,25,000 35,75,000
Retained earnings 32,00,000 31,60,000
93,25,000 82,45,000
Income Statement for the Financial year 2020-21
Rs. Rs.
Sales 34,90,000
Cost of goods sold (26,00,000)
Gross margin 8,90,000

Operating expenses (7,35,000)

1,55,000
Other Income (Expenses)
Interest paid (1,15,000)
Interest income received 30,000
Gain on sale of Investments 60,000
Loss on sale of Plant (15,000)
(40,000)
Profit before Tax 1,15,000
Income tax (35,000)
Profit after Tax 80,000
Additional information:
i. During the period 2020-21, Little Flower Ltd. purchased investments amounting to Rs.3,90,000
ii. The book value of the investments sold was Rs.4,50,000
iii. During the period a plant amounting to Rs.6,00,000 was purchased
iv. A machinery costing Rs.50,000 with accumulated depreciation of Rs.10,000 was sold for Rs.25,000
v. On March 31, 2021 Little Flower Ltd. issued bonds of Rs.5,00,000 at face value in exchange for a Plant
vi. During the period the company repaid Rs.2,50,000 bonds at face value on maturity
vii. During the period the company issued 75,000 common stock of Rs.10 each
viii. Cash dividends paid during 2020-21 amount to Rs.40,000
You are required to prepare a Statement of Cash Flows (using indirect method) for the period ended March
31, 2021.