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CASH FLOW ANALYSIS -PROBLEMS

2020, Shri Academy

https://doi.org/10.5281/zenodo.4073088

This pre-print deals with the basic problems on calculation of Cash flow from Operating Activities, Investment Activities, Financial Activities and preparation of Cash Flow Analysis / Statement.

CASH FLOW ANALYSIS – PROBLEMS Dr. Hariharan Narayanan Founder and Director Shri Academy Pune, Maharashtra, India © Dr. Hariharan Narayanan October 2020 https://shriacademy.co.in/home/home © Dr. Hariharan Narayanan 1. From the following Balance Sheet Prepare CFS as per AS-3. LIABILITIES Share Capital Profit and Loss Appropriation Account Long term Loan Sundry Creditors Bills Payable 2014 12000 8000 2015 13000 7000 15000 7500 2500 13500 6000 1000 Debentures 14000 11500 59000 52000 ASSETS Cash Debtors Stock Bills Receivable Land and Buildings Plant and Machinery Goodwill 2014 7500 8000 2015 6250 8000 6500 11500 11500 6750 8750 7000 10000 11750 4000 59000 3500 52000 2. From the following analyze the net flow of operating activities, investing activities and financial activities. LIABILITIES Share Capital Retained Earnings Long term Loan Debentures Creditors General Reserve Outstanding Expenses 2015 48,00,000 ASSETS 2015 2016 Cash and 2,80,000 1,70,000 Bank 5,00,000 7,20,000 Debtors 12,00,000 15,96,000 10,00,000 12,00,000 Stock 9,60,000 17,00,000 20,00,000 16,00,000 Plant and 36,00,000 35,00,000 Machinery 8,00,000 11,60,000 Land and 30,00,000 28,00,000 Buildings 8,00,000 9,00,000 Long 8,00,000 7,44,000 Term Investment 40,000 50,000 Prepaid 1,00,000 80,000 Expenses 99,40,000 1,05,90,000 99,40,000 1,05,90,000 https://shriacademy.co.in/home/home 2016 49,60,000 © Dr. Hariharan Narayanan 3. Prepare Cash Flow Statement from the following LIABILITIES Share Capital Retained Earnings Long term Loan Debentures Creditors Bills Payable 2017 40000 5000 10000 20000 8000 8000 2018 40000 7200 12000 16000 11600 9600 Outstanding Expenses General Reserve 400 8000 500 9000 99400 105900 ASSETS Cash and Bank Debtors Stock Plant and Machinery Land and Buildings Long Term Investment Prepaid Expenses 2017 2800 12000 9600 36000 30000 8000 2016 1700 15960 17000 35000 28000 7440 1000 800 99400 105900 Adjustment: Purchase of Land and Building is 12000 and the balance amount should be considered in the proportion 4:6 towards Depreciation and Sale 4. Prepare CFS from the following: LIABILITIES Creditors Debentures Loan from Bank Capital 2014 40000 25000 40000 125000 2015 44000 50000 153000 Profit and Loss a/c 30000 75000 260000 322000 ASSETS Cash Debtors Stock Machinery at Net Value Land Buildings 2014 10000 30000 35000 80000 2015 7000 50000 25000 55000 55000 50000 260000 85000 100000 322000 During the year a machine costing 10,000 (accumulated depreciation 3,000) was sold for 5,000. The provision for depreciation against machinery for 2014 is 25,000 and for 2015 is 40000. https://shriacademy.co.in/home/home © Dr. Hariharan Narayanan 5. From the following Balance Sheet Prepare a CFS as per AS-3. LIABILITIES Share Capital Profit and Loss account Long term Loan Creditors 2014 60,000 15,000 30,000 30,000 2015 50,000 25,000 25,000 20,000 Bills Payable 25,000 30,000 ASSETS Cash Debtors Stock Land and Buildings Plant and Machinery Goodwill 1,60,000 1,50,000 2014 10,000 20,000 15,000 25,000 2015 15,000 10,000 17,000 23,000 40,000 50,000 50,000 1,60,000 35,000 1,50,000 Adjustment: a. Interim Dividend of 12,000 is paid 6. From the following analyze the net flow of operating activities, investing activities and financial activities. LIABILITIES Share Capital Retained Earnings Long term Loan Creditors Bills Payable General Reserve Outstanding Expenses https://shriacademy.co.in/home/home 2017 2016 ASSETS 1,15,000 1,00,000 Cash 50,000 30,000 Debtors 45,000 55,000 Stock 38,000 59,000 Land and Buildings 59,000 48,000 Plant and Machinery 2,000 1,000 Goodwill Prepaid Expenses Bank 1,000 2,000 3,10,000 2,95,000 2017 45,000 16,000 31,000 46,000 2016 20,000 34,000 28,000 50,000 1,00,000 80,000 65,000 3,000 75,000 2,000 4,000 6,000 3,10,000 2,95,000 © Dr. Hariharan Narayanan