Funds flow statement (Solution of NEB Question) Principle of Accounting II Grade 12 (2078-02-23)
2060 Q.No.
The balance sheet of K and Co. as on 31st December are as
under.
|
Liabilities |
Yr.1st |
Yr. 2nd |
Assets |
Yr.1st |
Yr. 2nd |
|
Share capital 10% debenture General reserve Profit & Loss a/c Sundry creditors Bills payable Provision for bad debt |
520,000 400,000 100,000 80,000 80,000 40,000 5,000 |
600,000 300,000 120,000 150,000 70,000 50,000 6,000 |
Land & building Plant & machinery Inventory Sundry debtors Cash Goodwill Preliminary expenses |
400,000 110,000 250,000 200,000 200,000 40,000 25,000 |
500,000 150,000 200,000 296,000 100,000 30,000 20,000 |
|
|
12,25,000 |
12,96,000 |
|
12,25,000 |
12,96,000 |
Additional information:
i. Dividend paid for the year
II-Rs.50,000
ii. Depreciation charged during
the year.
Land & building Rs.20,000 and Plant
& machinery Rs. 15,000
Required: (a) Schedule of change
in working capital
(b)
Funds from operation (c) Funds flow
statement [3+3+3]
Statement or Schedule of Changes in Working Capital
|
Particulars |
Balance
Rs. |
Changes
in working capital Rs. |
||
|
1st year |
2nd year |
Increase |
Decrease |
|
|
Current Assets Cash............................ Sundry debtors................ Inventories/Stock............ Total Current Assets (CA) |
200,000 200,000 250,000 |
100,000 296,000 200,000 |
96,000 10,000 55,000 |
100,000 50,000 10,000 1,000 |
|
650,000 |
596,000 |
|||
|
Current Liabilities: Sundry creditors................. Bills payable....................... Provision for bad debt........... Total current Liabilities (CL) |
80,000 40,000 5,000 |
70,000 50,000 6,000 |
||
|
125,000 |
126,000 |
|||
|
Net working Capital (CA – CL) Decrease in working capital |
525,000 |
470,000 55,000 |
||
|
Total |
525,000 |
525,000 |
161,000 |
161,000 |
i. When net profit or loss is not given:
Dr. Adjusted
Profit & Loss Account Cr.
|
Particulars |
Amount |
Particulars |
Amount |
|
To Balance c/d (closing balance of P/L a/c) To Depreciation on fixed assets (20000+15000) To Goodwill written off To Preliminary expenses written off To Dividend paid............................... To Transfer to general reserve............... |
150,000 35,000 10,000 5,000 50,000 20,000 |
By Balance c/d (opening bal. of P/L a/c) By
Funds from operation (Bal.fig.) |
80,000 190,000 |
|
270,000 |
270,000 |
...........Company
Ltd.
Funds Flow
Statement
|
Sources of fund |
Amount |
Uses/Application of fund |
Amount |
|
Funds from operation .......... Issue of shares..................... Decrease in working capital (if) |
190,000 80,000 55,000 |
Purchase of land and building Redemption of debenture Purchase of Plant and machinery Dividend paid |
120,000 100,000 55,000 50,000 |
|
325,000 |
325,000 |
2064 Q.No.
The balance sheet of K and Co. as on 31st December are as
under.
|
Liabilities |
Yr.1st |
Yr. 2nd |
Assets |
Yr.1st |
Yr. 2nd |
|
Share capital Retained earning 10% debenture Creditors Bills payable Outstanding expenses |
200,000 50,000 50,000 100,000 20,000 10,000 |
300,000 60,000 100,000 50,000 20,000 20,000 |
Plant & machinery Stock Debtors Cash Bills receivable |
290,000 40,000 40,000 30,000 30,000 |
400,000 60,000 30,000 20,000 40,000 |
|
|
430,000 |
550,000 |
|
430,000 |
550,000 |
Additional information:
i. The net profit for the year 2
was Rs. 40,000 and dividend paid was Rs.30,000
ii. Depreciation for the year was
Rs. 40,000.
iii. Machinery having book value
of Rs. 30,000 on 31st December, year 2 was sold for Rs. 20,000.
iv. A new machinery was purchased
for Rs. 180,000.
Required: (a) Schedule of change
in working capital
(b)
Funds from operation (c) Funds flow
statement [4+2+4]
Statement or Schedule of Changes in Working
Capital
|
Particulars |
Balance
Rs. |
Changes
in working capital Rs. |
||
|
1st year |
2nd year |
Increase |
Decrease |
|
|
Current Assets Cash............................ Sundry debtors................ Inventories/Stock............ Bills receivable.............. Total Current Assets (CA) |
30,000 40,000 40,000 30,000 |
20,000 30,000 60,000 40,000 |
20,000 10,000 50,000 |
10,000 10,000 10,000 50,000 |
|
140,000 |
150,000 |
|||
|
Current Liabilities: Sundry creditors................. Bills payable....................... Outstanding expenses........... Total current Liabilities (CL) |
100,000 20,000 10,000 |
50,000 20,000 20,000 |
||
|
130,000 |
90,000 |
|||
|
Net working Capital (CA – CL) Increase in working capital |
10,000 50,000 |
60,000 |
||
|
Total |
60,000 |
60,000 |
80,000 |
80,000 |
Dr. Adjusted
Profit & Loss Account Cr.
|
Particulars |
Amount |
Particulars |
Amount |
|
To Net profit.......... To Depreciation on fixed assets To Loss on sale of assets.... |
40,000 40,000 10,000 |
By Funds from operation (Bal.fig.) |
90,000 |
|
90,000 |
90,000 |
...........Company Ltd.
Funds
Flow Statement
|
Sources of fund |
Amount |
Uses/Application of fund |
Amount |
|
Funds from operation .......... Issue of shares..................... Issue of Debenture................. Sale of machinery.................. |
90,000 100,000 50,000 20,000 |
Purchase of machinery Increase in working capital Dividend paid |
180,000 50,000 30,000 |
|
260,000 |
260,000 |
38. Following were the comparative Balance Sheet of
the company.
|
Liabilities |
2054 |
2055 |
Assets |
2054 |
2055 |
|
Share capital General reserve Profit and loss account 5% Debenture Provision for tax Bills payable Creditors |
250,000 50,000 70,000 140,000 50,000 18,000 22,000 |
350,000 70,000 90,000 100,000 60,000 14,000 26,000 |
Machinery Building Debtors Cash Stock Bank |
200,000 40,000 150,000 20,000 150,000 40,000 |
170,000 110,000 190,000 13,000 180,000 47,000 |
|
|
600,000 |
710,000 |
|
600,000 |
710,000 |
Additional information:
Depreciation on machinery Rs. 5,000
Provision for tax Rs. 20,000
Required : (a) Statement of changes in working
capital (b) Funds from operation
(c) Funds flow statement [3+3+3]
Solution,
Statement or Schedule of Changes in Working
Capital
|
Particulars |
Balance
Rs. |
Changes
in working capital Rs. |
||
|
1st year |
2nd year |
Increase |
Decrease |
|
|
Current Assets Cash............................ Debtors................ Inventories/Stock............ Bank.............. Total Current Assets (CA) |
20,000 150,000 150,000 40,000 |
13,000 190,000 180,000 47,000 |
40,000 30,000 7,000 4,000 |
7,000 4,000 70,000 |
|
360,000 |
430,000 |
|||
|
Current Liabilities: Creditors................. Bills payable....................... Total current Liabilities (CL) |
22,000 18,000 |
26,000 14,000 |
||
|
40,000 |
40,000 |
|||
|
Net working Capital (CA – CL) Increase in working capital |
320,000 70,000 |
390,000 |
||
|
Total |
390,000 |
390,000 |
91,000 |
91,000 |
Dr. Adjusted
Profit & Loss Account Cr.
|
Particulars |
Amount |
Particulars |
Amount |
|
To Balance b/d (closing bal. of P/L a/c) To Depreciation on fixed assets To Provision for taxation.... To Transfer to general reserve |
90,000 5,000 20,000 20,000 |
By Balance b/d (opening bal of P/L a/c) By Funds from operation (Bal.fig.) |
70,000 65,000 |
|
135,000 |
135,000 |
...........Company Ltd.
Funds Flow Statement
|
Sources of fund |
Amount |
Uses/Application of fund |
Amount |
|
Funds from operation .......... Issue of shares..................... Sale of machinery (30,000 – 5,000) |
65,000 100,000 25,000 |
Purchase of Building Increase in working capital Redemption of debenture Provision for taxation 2 |
70,000 70,000 40,000 10,000 |
|
190,000 |
190,000 |
CP -11 The following information of
XYZ company are given below:
|
Particulars |
Amount |
|
Increase in working
capital............................................ Net profit before goodwill written
off........................... Depreciation of fixed
assets........................................... Machine
purchase.......................................................... Dividend
paid................................................................ Issue of share
capital..................................................... Goodwill written
off...................................................... Sale of investment (cost price Rs.
172,810).................. Sale of plant and
machinery.......................................... Redemption of
Debentures............................................ Premium on redemption of
Debentures......................... |
200,380 100,000 55,320 320,250 61,250 87,500 175,000 175,000 210,000 43,750 2,190 |
Required : (a) Funds from operation
(b) Funds flow statement
Solution,
Dr. Adjusted
Profit & Loss Account Cr.
|
Particulars |
Amount |
Particulars |
Amount |
|
To Net profit before goodwill written off To Depreciation on fixed assets To Premium on redemption of Debentures |
100,000 55,320 2,190 |
By Gain on sale of investment By Funds from operation (Bal.fig.) |
2,190 155,320 |
|
157,510 |
157,510 |
..........Company Ltd.
Funds Flow Statement
|
Sources of fund |
Amount |
Uses/Application of fund |
Amount |
|
Funds from operation.......... Issue of shares..................... Sale of investment........... Sale of plant and machinery |
155,320 87,500 175,000 210,000 |
Purchase of Machinery Increase in working capital Redemption of debenture Dividend paid Premium on redem. of deben. |
320,250 200,380 43,750 61,250 2,190 |
|
627,820 |
627,820 |
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