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  • Problems - Cash Flow

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    Kevin Joy
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    Question 4 asks to calculate net cash flows from investing activities using information about purchases and sales of plant and machinery, long-term investments, land, and additional details. Question 5 asks to calculate cash from financing activities using information about equity capital, securities premium,

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    Problems -Cash Flow (1)

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    Question 4 asks to calculate net cash flows from investing activities using information about purchases and sales of plant and machinery, long-term investments, land, and additional details. Question 5 asks to calculate cash from financing activities using information about equity capital, securities premium,

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    16 views5 pages

    Problems - Cash Flow

    Uploaded by

    Kevin Joy
    Question 4 asks to calculate net cash flows from investing activities using information about purchases and sales of plant and machinery, long-term investments, land, and additional details. Question 5 asks to calculate cash from financing activities using information about equity capital, securities premium,

    Copyright:

    © All Rights Reserved
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    of 5

    Problems

    Question No. 1
    From the following information, calculate net cash flow from operating
    activities.
    Particulars Amount Particulars Amount
    To, Purchases By, Sales
    Cash 6,00,000 Cash 9,00,000
    Credit 2,00,000 Credit 1,00,000
    To, Wages 1,00,000
    To, Gross Profit 1,00,000

    Total 10,00,000 Total 10,00,000


    To, Depreciation on Plant 20,000 By, Gross Profit b/d 1,00,000
    To, Salaries 50,000 By, Interest Received 20,000
    To, Loss on Sale of Plant 5,000 By, Profit on Sale of 30,000
    Net Profit 75,000 Long-term Investments

    1,50,000 1,50,000
    All credit sales and credit purchases were made during the last month of
    the year and no cash is paid to creditors or collected from debtors
    during the year. You are required to ascertain cash from operating
    activities by adopting direct method
    Question No. 2
    From the following summarized cash book of Green View Limited, calculate
    cash flows from operating activities.
    Particulars Amount Particulars Amount
    Balance b/d 50 Payment to Suppliers 2600
    Receipts from customers 3,000 Purchase of Plant 400
    Issue of Shares 1,000 Wages and Salaries 200
    Sale of Plant 450 Rent Rates and Taxes 100
    Income Tax 50
    Dividend 100
    Repayment of Bank Loan 150
    Balance c/d 900

    Total 4500 Total 4500


    Question No. 3
    Calculate Net Cash flow from operating activities from the following P&L
    account.
    Particulars Amount Particulars Amount
    Salaries 14,000 Gross Profit 52,000
    Rent 10,000 Profit on Sale of 9,000
    Provision for bad debts 2,000 Land 3,000
    Depreciation 3,000 Income Tax Refund
    Goodwill Written off 2,500
    Loss on Sale of Pant 1,500
    Provision for Tax 6,000
    Proposed dividend 7,000
    Net Profit 18,000
    Total 64,000

    Question No. 4
    Calculate net cash flows from investing activities
    2018 2019
    Plant and Machinery 8,50,000 10,00,000
    Long Term Investments 40,000 1,00,000
    Land 2,00,000 1,00,000
    Additional Information
    a. Depreciation charged on Plant and machinery Rs. 50,000
    b. Plant and machinery with a book value of Rs. 60,000 was sold for Rs.
    40,000
    c. Land was sold at a profit of Rs. 60,000
    d. No investment was sold during the year

    Question No. 5
    From the following information calculate cash from financing activities.
    2018 2019
    Equity capital 4,00,000 7,50,000
    Securities Premium 40,000 75,000
    12% Debentures 1,50,000 1,00,000
    Additional Information
    a. Interest paid on debentures Rs. 18,000
    b. Debentures were redeemed at a premium of 10% and the premium on
    redemption was adjusted against securities premium account
    c. 10% dividend was paid to equity shareholders in 2019 for the year 2018
    Question No 6
    Question No 7
    Question No 8

    Liabilities 2018 2019 Assets 2018 2019


    Share Capital 4,00,000 5,00,000 Goodwill 30,000 20,000
    Reserve Fund 1,00,000 1,00,000 Land and 3,45,000 4,55,000
    P&L Account 2,00,000 3,00,000 Building 3,00,000 4,40,000
    Debentures 2,50,000 2,00,000 Plant & 1,80,000 1,50,000
    Sundry Creditors 75,000 50,000 Machinery 1,50,000 70,000
    Bills Payable 35,000 50,000 Stock 1,20,000 1,10,000
    Provision for 65,000 45,000 Sundry Debtors
    Taxation Cash
    Total 11,25,000 12,45,000 Total 1125,000 12,45,000
    a. Depreciation provided during the year on Plant and Machinery Rs.40,000 and
    on Land and Building Rs.30,000.
    b. Tax paid during the year Rs.25,000
    c. Dividend paid for the year Rs.75,000
    d. A plant book value of which Rs.10,000 was sold for Rs.2,500. Accumulated
    depreciation thereon being Rs.2,000. Prepare Cash Flow Statement

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