Practice Questions Set 3

Q.1 Following is the information available from the books of Mahek Ltd. for the financial year
2009-2010. Find out cash flow from operations:

Debtors (01/04/09) 105,000

Debtors (31/03/10) 141,000
Inventories (01/04/09) 150,000
Inventories (31/03/10) 90,000
Creditors (01/04/09) 78,000
Creditors (31/03/10) 105,000
Net profit for the year 240,000
Depreciation expensed during the year 60,000

Q.2 Calculate cash flow from operations of Spencer Ltd. using the given information:

Proposed dividend 60,000

Profit on sale of investments 10,000
Provision for taxation 50,000
Goodwill written off 10,000
License fee written off 8,000
Depreciation expense 80,000
Loss on sale of plant 16,000
Income tax paid 9,600
Dividends paid 10,000

During the year, the account payables reduced by Rs 36,000. There was an increase of Rs 40,000
in inventories and a decrease of Rs 24000 in debtors. The net profit at the end of the year was Rs
301,600.

Q.3 Following are the summarized balance sheets of Sukanya Ltd. as on 31st March 2014 and 31st
March 2015:

Assets 31/03/14 31/3/15 Liabilities 31/03/14 31/03/15

Goodwill - 10,000
Cash 1,000 1,200 Common Stock 400,000 500,000
Bank - 16,000 Bank loan 140,000 -
Inventories 200,000 148,000 Retained Earnings 61,000 61,200
Debtors 160,000 128,400 Provision for Taxation 60,000 70,000
Machinery 300,000 338,000 Creditors 300,000 270,400
Land & Building 300,000 260,000
961,000 901,600 961,000 901,600

1
Additional Information for 2014-15 is given below:

1. Machinery was purchased for Rs 16,000.

2. Provision was made for income tax (Rs 66,000) during the year.
3. Interim dividend of Rs 46,000 was declared and paid.
4. The following assets of another company were purchased for a consideration of Rs
100,000 paid for in common stock: Inventories: Rs 40,000 & Machinery: 50,000.
5. A machinery was sold at a loss of Rs 400.
6. Depreciation expense: Machinery-Rs 24,000 & Land & Building- Rs 40,000

Prepare a cash flow statement for the year 2014-15.

Q. 4: From the following Balance Sheets of Krisha Ltd. and additional information given below,
prepare a Cash Flow Statement for the year 2008-09:

Assets 31/03/08 31/03/09 Liabilities 31/03/08 31/03/09

Accrued income 60,000 90,000 Retained earnings 210,000 354,000
Bank 30,000 24,000 Creditors 165,000 249,000
Inventories 231,000 327,000 Proposed dividend 126,000 150,000
Cash 45,000 30,000 Expenses payable 60,000 48,000
Debtors 480,000 600,000 Equity share capital 900,000 1,200,000
Machinery 240,000 600,000 Preference share 450,000 300,000
capital
Goodwill 345,000 270,000 Provision for 120,000 150,000
taxation
Land & Building 600,000 510,000
2,031,000 2,451,000 2,031,000 2,451,000

Additional Information:

1. Interim dividend declared and paid during 2008-09 amounted to Rs 60,000.

2. During the year 2008-09, depreciation charged was Rs 30,000 on machinery and Rs
90,000 on land and building.
3. Income tax paid during the year 2008-09 was Rs 105,000.