The summarized Balance Sheet of Flora Limited for the year ended 31 st March, 2024 and 31 st March, 2025 are as below: Assets 31.03.2025 (₹)…

CA Intermediate · Advanced Accounting · MTP · May 2025
The summarized Balance Sheet of Flora Limited for the year ended 31 st March, 2024 and 31 st March, 2025 are as below: Assets 31.03.2025 (₹) 31.03.2024 (₹) Goodwill 60,000 1,12,000 Land 23,00,000 24,00,000 Furniture and Fixtures 1,92,000 1,76,000 Vehicles 88,000 1,12,000 Office Equipment 84,000 Long-term Investments 2,40,000 4,40,000 Stock-in-hand 3,84,000 3,52,000 Bills Receivables 72,600 58,000 Trade Receivables 1,84,000 2,08,000 Cash and Bank Balances 5,19,400 1,38,000 Total 41,24,000 39,96,000 Liabilities Equity Share Capital 27,20,000 20,00,000 General Reserves 3,60,000 2,40,000 Profit and Loss Account 3,72,000 2,08,000 Capital Reserve 3,00,000 8% Debentures of 100 each 12,00,000 Loan from Mr. Andrew - 60,000 Bills Payables 44,000 52,000 Trade Payables 1,96,000 1,80,000 Creditors for Equipment 42,000 Outstanding Expenses 18,000 12,000 Provision for Taxation 72,000 44,000 Total 41,24,000 39,96,000 Additional Information: 1. On 1 st April, 2024, one of the vehicles was sold for 12,000. No new purchases were made during the year. 2. A part of the total land was sold for 5,00,000 (Cost - 4,00,000) and the balance land was revalued. Capital reserve consists of profit on revaluation of balance land. No new purchases were made during the year. 3. Depreciation provided during the year - Furniture and Fixtures - 20,000 Vehicles - 8,800 4. Interim dividend of 20,000 was paid during the year. 5. Provision for taxation for the year 2024-2025 was - 64,000. 6. 8% Debentures were redeemed at par after half year interest payment on 30 th September, 2024, 7. Part of the long-term investments were sold at a profit of 32,000. 8. Interest income received during the year on long – term investment was - 26,000. You are required to prepare Cash Flow Statement from Operating Activities for the year ended 31 st March, 2025 using indirect method. (All workings should form part of the answer)

Suggested Answer and Working Notes:

Cash Flow from Operating Activities Particulars ₹ Profit before tax 3,68,000 (Add) Depreciation 28,800 Interest on 8% Debentures 48,000 Loss on sale of Vehicle 3,200 Goodwill Written off 52,000 (Less) Profit on sale of Land (1,00,000) Profit on sale of Long term Investments (32,000) Interest Income Received (26,000) Operating Profit before Working Capital 3,42,000 (Add) Increase in Outstanding Expenses 6,000 (Add) Increase in trade payable 16,000 (less) Decrease in bills payable (8,000) (Less) Increase in stock (32,000) (Less) Increase in bills receivable (14,600) Decrease in trade receivable 24,000 Operating profit before tax 3,33,400 Income tax paid (WN 4) 36,000 Net cash from Operating Activities 2,97,400 Working Notes : 1. Vehicle A/c Particulars ₹ ₹ To Bal. b/d 1,12,000 By Bank A/c 12,000 By Depreciation A/c 8,800 By P&L A/c 3,200 By Bal. c/d 88,000 1,12,000 1,12,000 2. Land A/c Particulars ₹ ₹ To Bal. b/d 24,00,000 By Bank A/c 5,00,000 To P&L A/c 1,00,000 By Bal. c/d 23,00,000 To Capital 3,00,000 28,00,000 28,00,000 3. Furniture / Fixture A/c Particulars ₹ ₹ To Bal. b/d 1,76,000 By Depreciation 20,000 To Bank A/c 36,000 By Bal. c/d 1,92,000 2,12,000 2,12,000 4. Provision for taxation A/c Particulars ₹ ₹ To Bank A/c 36,000 By Bal. b/d 44,000 To Bal. b/d 72,000 By P&L A/c 64,000 1,08,000 1,08,000 5. Calculation of Profit before tax: ₹ Increase in P&L A/c 1,64,000 Increase in General Reserve A/c 1,20,000 (Add) Current year Provision for Tax 64,000 (Add) Interim Dividend Paid 20,000 Profit before Tax 3,68,000

Topics: AS 3

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic