From the following information, prepare cash flow statement of Kiran Ltd. as at 31st March, 2025 by using indirect method: 2024 ₹ 2025 ₹ Liabilities…

CA Intermediate · Advanced Accounting · RTP · September 2025
From the following information, prepare cash flow statement of Kiran Ltd. as at 31st March, 2025 by using indirect method: 2024 ₹ 2025 ₹ Liabilities Share capital 12,00,000 12,00,000 Profit & Loss A/c 8,50,000 10,00,000 Long Term Loans 10,00,000 10,60,000 Trade payables 3,50,000 4,00,000 34,00,000 36,60,000 Assets Fixed Assets 17,00,000 20,00,000 Investment in shares 2,00,000 2,00,000 Inventory 6,80,000 7,00,000 Trade receivables 7,20,000 6,60,000 Cash 60,000 70,000 Bills Receivable 40,000 30,000 34,00,000 36,60,000 Income Statement for the year ended 31st March, 2025 Particulars ₹ Sales 40,80,000 Less: Cost of sales 27,20,000 Gross Profit 13,60,000 Less: Operating expenses: Administrative expenses 4,60,000 Depreciation 2,20,000 (6,80,000) Operating Profit 6,80,000 Add: Non-operating incomes (dividend received) 50,000 7,30,000 Less: Interest paid (1,40,000) Profit before tax 5,90,000 Less: Income-tax (2,60,000) Profit after tax 3,30,000 Statement of Retained Earnings Particulars ₹ Opening balance 8,50,000 Add: Profit 3,30,000 11,80,000 Less: Dividend paid (1,80,000) Closing balance 10,00,000

Suggested Answer and Working Notes:

Cash flow statement of Kiran Ltd. for the year ended 31st March 2025 Particulars ₹ (i) Cash flows from operating activities Profit before tax 5,90,000 Add: Depreciation (Non-cash expenses) 2,20,000 Interest (Non-operating expenses) 1,40,000 9,50,000 Less: Dividend (Non-operating income) (50,000) Operating Profit 9,00,000 Add: Decrease in Bills Receivable 10,000 Decrease in Trade receivables 60,000 Increase in Trade payables 50,000 10,20,000 Less: Increase in inventory (20,000) Cash flow from operations before tax 10,00,000 Less: Tax paid (2,60,000) Cash flow from operating activities 7,40,000 (ii) Cash flows from investing activities Purchase of fixed assets [20,00,000 + 2,20,000 - 17,00,000] (5,20,000) Dividend on investments 50,000 Cash used in investing activities (4,70,000) (iii) Cash flows from financing activities Long term loan taken 60,000 Interest paid (1,40,000) Dividend paid (1,80,000) Cash used in financing activities (2,60,000) Net increase in cash during the year 10,000 Add: Opening cash balance 60,000 Closing cash balance 70,000

Topics: AS 3

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