From the following information, prepare Cash Flow Statement of Amex Limited for the year ended 31st March, 2026 by using indirect method: Balance…

CA Intermediate · Advanced Accounting · RTP · September 2026
From the following information, prepare Cash Flow Statement of Amex Limited for the year ended 31st March, 2026 by using indirect method: Balance Sheets as on Liabilities 31.3.2025 ₹ 31.3.2026 ₹ Share Capital 5,00,000 6,00,000 Reserves 1,50,000 1,80,000 Profit and Loss Account 40,000 65,000 Debentures 3,00,000 2,50,000 Creditors for goods 1,70,000 1,60,000 Provision for Income Tax 60,000 80,000 12,20,000 13,35,000 Assets Gross Block 10,00,000 11,20,000 Less: Depreciation (3,70,000) (4,60,000) Net Block 6,30,000 6,60,000 Stock in trade 2,40,000 3,70,000 Book Debts 2,50,000 2,30,000 Cash in hand and at bank 80,000 60,000 Miscellaneous Expenditure Discount on issue of shares 10,000 7,500 Preliminary Expenses 10,000 7,500 12,20,000 13,35,000 Profit and Loss Appropriation Account for the year ended 31st March, 2026 Particulars Debit (₹) Particulars Credit (₹) To Transfer to Reserves 30,000 By Balance b/d 40,000 To Interim dividend paid 80,000 By Net Profit for current year 1,35,000 To Balance carried to Balance Sheet 65,000 1,75,000 1,75,000

Suggested Answer and Working Notes:

Amex LTD. Cash Flow Statement for the year ended 31st March, 2026 ₹ ₹ (i) Cash flow from Operating Activities Net Profit before tax 1,35,000 Add back: Depreciation (4,60,000 – 3,70,000) 90,000 Discount on issue of shares written off 2,500 Preliminary expenses written off 2,500 Provision for tax 80,000 1,75,000 Operating Profit before working capital changes 3,10,000 Less: Increase in stock (1,30,000) Decrease in creditors (10,000) (1,40,000) 1,70,000 Add: Decrease in book debts 20,000 Cash generated from Operations 1,90,000 Less: Income tax paid (60,000) Net cash generated from Operating Activities 1,30,000 (ii) Cash flow from Investing Activities Fixed Assets purchased (1,20,000) Net cash used in Investing Activities (1,20,000) (iii) Cash flow from Financing Activities Issue of shares 1,00,000 Redemption of Debentures (50,000) Interim Dividend paid (80,000) Net cash used in Financing Activities (30,000) Net decrease in cash (20,000) Opening balance of cash and cash equivalents 80,000 Closing balance of cash and cash equivalents 60,000

Topics: AS 3

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