Prepare a cash flow statement from the following Balance Sheets as at 31−3−08 and 31−3−07 presented by PNX fertilizers Ltd.
Balance Sheet
31−3−08 | 31−3−07 | |||
Equity share Capital | 8500 | 7000 | ||
General Reserve | 3800 | 4000 | ||
Profit & Loss Account | 0 | 250 | ||
Share Premium Account | 1500 | 750 | ||
Shareholder’s Funds | 13800 | 12000 | ||
Secured Loans | 4800 | 5000 | ||
Unsecured Loans | 5350 | 4000 | ||
Loan Funds | 10150 | 9000 | ||
Sources | 23950 | 21000 | ||
Fixed Assets | ||||
Gross Block | 22400 | 21000 | ||
Accumulated Depreciation | 3450 | 3200 | ||
Net Block | 18950 | 17800 | ||
Capital Work−In−Progress | 1860 | 0 | ||
Investments | 1650 | 2320 | ||
Current Assets, Loans & Advances | ||||
Inventories | 2510 | 2600 | ||
Debtors | 1090 | 1200 | ||
Cash & Bank Balances | 120 | 280 | ||
Loans | 1700 | 200 | ||
Advance Tax | 0 | 500 | ||
5420 | 4780 | |||
Creditors | 1050 | 1200 | ||
Outstanding expenses | 30 | 0 | ||
Tax Provision | 0 | 500 | ||
Proposed Dividend | 3400 | 2800 | ||
4480 | 4500 | |||
Net Current Assets | 940 | 280 | ||
Miscellaneous Expenditure | 550 | 600 | ||
Applications | 23950 | 21000 |
Other Informations :
1. Fixed Assets costing Rs. 4,00,000, accumulated depreciation Rs. 3,00,000 were sold for Rs. 1,50,000.
2. Actual tax liability for 2006−07 was Rs. 5,00,000.
3. Loans represent long term loans given to group companies.
4. Interest on loan funds for 2006−07 was Rs. 14,21,000 and interest and dividend income were Rs. 4,02,000.
5. Investments costing Rs. 20,00,000 were sold for Rs. 25,00,000.
Solution.
CASH FLOW STATEMENT
Particulars | Rs. (in 000) | Total Rs. (in 000) |
CASH FLOW FROM OPERATING ACTIVITIES (A) | ||
250 | ||
Net Loss as per Profit & Loss A/c | ||
Add: | ||
Prepored dividend 3400 | ||
Depreciation 550 | ||
Misc. Exp written off 50 | ||
Interest on loan fund 1421 | ||
General Reserve (−) 200 | 5221 | |
    | 4971 | |
Less: | ||
Profit on | ||
Profit on | ||
Interest & Dividend Income 402 | 952 | |
4019 | ||
Net Profit before change in working Capital | ||
Add: Decrease in C.A. & Increase in C.L. | ||
Inventories 90 | ||
Debtors 110 | ||
Advance Tax 500 | ||
Outstanding Exp. 30 | 730 | |
4749 | ||
Less: Increase in C.A. & Decrease in C.L. | ||
Creditors 150 | 150 | |
Net Profit before Tax | 4599 | |
Less: Tax Paid | 500 | 4099 |
CASH FLOW FROM INVESTING ACTIVITIES (B) | ||
Interest & Dividend Income 402 | ||
Purchase of Investment (−) 1330 | ||
Capital work in progress (−) 1860 | ||
Purchase of Fixed Assets (−) 1800 | ||
Loans (−) 1500 | (3488) | |
CASH FLOW FROM FINANCING ACTIVITIES (c) | ||
Issue of Share capital 1500 | ||
Share Premium 750 | ||
Payment of Secured loan (200) | ||
Unsecured Loan 1350 | ||
Dividend paid (2800) | ||
Interest on Loan (1421) | (821) | |
Net Cash used in Financing Activities | (160) | |
Add: Op cash & Bank Balance | 280 | |
120 |
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