Purse Ltd., a non financial company has the following entries in its Bank Account. It has sought your advice on the treatment of the same for…
CA Intermediate · Advanced Accounting · RTP · September 2024
Purse Ltd., a non financial company has the following entries in its Bank Account. It has sought your advice on the treatment of the same for preparing Cash Flow Statement. (i) Loans and Advances given to the following and interest earned on them: to suppliersto employeesto its subsidiaries companies (ii) Investment made in subsidiary Wallet Ltd. and dividend received (iii) Dividend paid for the year (iv) Insurance claim received against loss of property, plant and equipment by fire. Discuss in the context of AS 3 'Cash Flow Statement'.
Suggested Answer and Working Notes:
Treatment as per AS 3 'Cash Flow Statement' (i) Loans and advances given and interest earned to suppliers Cash flows from operating activitiesto employees Cash flows from operating activitiesto its subsidiary companies Cash flows from investing activities (ii) Investment made in subsidiary company and dividend received Cash flows from investing activities (iii) Dividend paid for the year Cash flows from financing activities (iv) Insurance claim received against loss of property, plant and equipment by fire.
Topics: AS 3
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