Cash Flow Statement

CLASS EXERCISE
1. The transactions for the year ending 31 Dec 2007 include the following: a. Borrowed from bank and urchased land !s "# 00#000 b. $old in%estments !s 7# 00#000 c. &aid di%idends !s 3# 00#000 d. 'ssued shares !s 3# (0#000 e. &urchased machinery and e)ui ment !s 1# 7(#000 f. Bank loan aid !s *# (0#000 g. &aid accounts recei%able outstanding !s 1# 00#000 h. +ccounts ayable increased !s 1# ,0#000 -alculate com any.s net cash flows in in%esting and financing acti%ities. 2. -alculate the following from the information gi%en below: /a0 -ash recei%ed from customers1 /b0 'nterest recei%ed1 /c0 -ash aid for merchandi2e1 /d0 -ash aid for o erating e3 enses1 /e0 'nterest aid1 /f0 'ncome ta3 aid Income Statement for the year ended 30 June 2007 $ales 4 -56$ 4 De reciation 4 5ther o erating e3 enses 5&7!+T'86 '8-597 5ther income and e3 enses 6ain on sale of in%estments 'nterest income 6ain on sale of marketable securities 'nterest e3 ense &!5:'T B7:5!7 T+; 4 'ncome ta3 &!5:'T +:T7! T+; ,0#000 /20#0000 70#000 /30000 /1"0000 (3000 10000 *000 "000 /(0000 *<000 /2<0000 "0000

'nformation about changes in the com any.s balance sheet during the year are as follows: 1. 'n%entory decreased by !s 10#000 and accounts ayable decreased by !s 1(000 2. +ccounts recei%able decreased by !s 7(00 3. +ccrued interest recei%able increased !s "000 during the year ". The liability for accrued interest ayable decreased by !s <000 during the year

Cash Flow Statement (. The liability for accrued income ta3 ayable increased by !s ,000 during the year *. short term re ayments of o erating e3 enses decreased !s *000 and liability for o erating e3 enses !s 2000 3. &resented below is the com arati%e balance sheet for +B- =td. as on 9arch: art!culars -ash +ccounts recei%able 'n%entory &re aid e3 enses =and 7)ui ment +ccumulated de reciation4 7)ui ment Building +ccumulated de reciation4 Building +ccounts ayable Bonds ayable 7)uity share ca ital /!s 10 share0 !etained earnings 2007 "0#000 77#000 1#32#000 12#1"0 1#2(#000 2#00#000 /*0#0000 2#(0#000 /7(#0000 7#0$#$%0 33#000 2#3(#000 2#<0#000 1#(3#1"0 7#0$#$%0 200" (7#000 *"#000 1#"0#000 1*#("0 1#(0#000 1#7(#000 /"2#0000 2#(0#000 /(0#0000 7#"0#&%0 "(#000 2#*(#000 2#(0#000 2#00#("0 7#"0#&%0

+dditional information: 1. 5 erating e3 enses include de reciation e3 ense of !s 70#000 and amorti2ation of re aid e3 enses !s "#"00. 2. =and was sold for cash at book %alue. 3. -ash di%idends of !s 7"#2,0 were aid. ". 8et income for the year 2007 was !s 2*#<,0. (. 7)ui ment was urchased for !s *(#000 cash. 'n addition e)ui ment costing !s "0#000 with book %alue of !s 13#000 was sold for !s 1(#000 cash. *. Bonds were redeemed at face %alue by issuing 3000 e)uity shares of !s 10 at ar. &re are a $tatement of -ash :low for 2007 using 'ndirect 9ethod.

Dr. $wati Dhawan /!esource :aculty0