The summarized Balance Sheet of Swan 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 · September 2025
The summarized Balance Sheet of Swan 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 37,500 70,000 Land 14,37,500 15,00,000 Furniture and Fixtures 1,20,000 1,10,000 Vehicles 55,000 70,000 Office Equipment 52,500 - Long-term Investments 1,50,000 2,75,000 Stock-in-hand 2,40,000 2,20,000 Bills Receivables 45,375 36,250 Trade Receivables 1,15,000 1,30,000 Cash and Bank Balances 3,24,625 86,250 Total 25,77,500 24,97,500 Liabilities 31.03.2025 (₹) 31.03.2024 (₹) Equity Share Capital 17,00,000 12,50,000 General Reserves 2,25,000 1,50,000 Profit and Loss Account 2,32,500 1,30,000 Capital Reserve 1,87,500 - 8% Debentures of 100 each - 7,50,000 Loan from Mr. Rajesh - 37,500 Bills Payables 27,500 32,500 Trade Payables 1,22,500 1,12,500 Creditors for Equipment 26,250 - Outstanding Expenses 11,250 7,500 Provision for Taxation 45,000 27,500 Total 25,77,500 24,97,500 Additional Information: On 1 st April, 2024, one of the vehicles was sold for 7,500. No new purchases were made during the year.A part of the total land was sold for 3,12,500 (Cost - 2,50,000) and the balance land was revalued. Capital reserve consists of profit on revaluation of balance land. No new purchases were made during the year.Depreciation provided during the year - Furniture and Fixtures - 12,500 Vehicles - 5,500Interim dividend of 12,500 was paid during the year.Provision for taxation for the year 2024-2025 was - 40,000.8% Debentures were redeemed at par after half year interest payment on 30 th September, 2024,Part of the long-term investments were sold at a profit of 20,000.Interest income received during the year on long – term investment was - 16,250. 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 2,30,000 Add: Depreciation 18,000 Interest on 8% Deb. 30,000 Loss on sale of Vehicle 2,000 Goodwill Write off 32,500 Less: Profit on sale of Land (W.N.2) (62,500) Profit on sale of Long term Investments (20,000) Int. Income Received (16,250) Operating Profit before Working Capital 2,13,750 Add: Increase in Out standing Exp. 3,750 Increase in trade payable 10,000 Less: Decrease in bills payable (5,000) Increase in stock (20,000) Increase in bills receivable (9,125) Decrease in trade receivable 15,000 Operating profit before tax 2,08,375 Income tax paid (WN 4) 22,500 Net cash from Operating Activities 1,85,875 Working Notes: 1. Vehicle Account To Balance b/d 70,000 By Bank A/c 7,500 By Depreciation A/c 5,500 By P&L A/c 2,000 By Balance c/d 55,000 70,000 70,000 2. Land Account To Balance b/d 15,00,000 By Bank A/c 3,12,500 To P&L A/c 62,500 By Balance c/d 14,37,500 To CR 1,87,500 17,50,000 17,50,000 3. Furniture / Fixture Account To Balance b/d 1,10,000 By Depreciation 12,500 To Bank A/c 22,500 By Balance c/d 1,20,000 1,32,500 1,32,500 4. Provision for taxation Account To Bank A/c 22,500 By Balance b/d 27,500 To Balance b/d 45,000 By P&L A/c 40,000 67,500 67,500 5. Calculation of Profit Before Tax: Increase in P&L A/c 1,02,500 Increase in General Reserve A/c 75,000 Add: Current Year Provision for Tax 40,000 Add: Interim Dividend Paid 12,500 Profit before Tax 2,30,000

Topics: AS 3

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