Prepare a statement showing applications and sources of funds during the year 2004.
| Dec31,2004 Rs. 6,20,000 80,000 3,75,000 5,000 |
Dec31,2003
Assets : Rs.
Fixed assets (Net) 5,10,000
Investment 30,000
Current Assets 2,40,000
Discount on Debentures 10,000
Liabilities and Capital
Share Capital (Equity) 3,00,000 3,50,000
Share Capital (Preference) 2,00,000 1,00,000
Share Capital (Preference) 2,00,000 1,00,000
Debentures 1,00,000 2,00,000
Reserves 1,10,000 2,70,000
Provision for doubtful debts 10,000 15,000
Current Liabilities 70,000 1,45,000
---------- -----------
7,90,000 1,45,000
----------- ------------
You are informed that during the year :
| i) ii) iii) Further |
A machine costing Rs. 70,000 book value Rs. 40,000 was disposed for Rs.
25,000;
Preference share redemption was carried out at a premium of 5% and
Dividend @ 15% was paid on equity shares for the year 2003 _
a) The provision for depreciation stood at Rs. 1,50,000 On 31.12.2003 and at Rs. 1,90,000 on 31,12.2004
b) Stock which was valued at Rs. 90,000 as on 31.12.2003 was written upto its cost Rs. 1,00,000 for preparing the profit and loss account for 2004.
Funds Flow Statement is also called statement of sources and. Application of Funds (1) Statement of changes in Working Capital
| | 2003 | 2004 | Charges Increase (+) | In working capital Decrease (-) |
| Current Assets | | | | |
| Investment | 30000 | 80000 | 50000 | - |
| Current assets | 240000 | 375000 | 13500 | - |
| Current Liabilities | 70000 | 140000 | - | 70000 |
| | | | 185000 | 70000 |
| | | | | 115000 |
| Increase in working | | | | |
| | | | 185000 | 185000 |
| 70,000 30,000 40,000 25,000 15,000 |
Profit on sale of machine
Cost of Machine
Depreciation on machine
Written Down Value of machine Sale proceed____________
Loss on sale of Machine
Machinery Account (Fixed Asset)
| By Balance b/d | 5,10,000 | By accumulated | |
| By Bank A/c | 1,80,000 | Depreciation on | |
| (Balancing figure) | | Machine sold | 30,000 |
| being new purchases | | By cash (sale) | 25,000 |
| | | By Balance c/d | 6,20,000 |
| | | By loss on sale | 15,000 |
| 6,90,000 | 6,90,000 | ||
Accumulated Depreciation A/c.
| To Depreciation On m/c sold To Balance c/d | 30,000 1,90,000 | By Balance b/d By deprepiation Charged to PGL | 1,50,000 70,000 |
| 2,20,000 | 2,20,000 | ||
| 2,70,000 1,10,000 1,60,000 70,000 5,000 15,000 |
Funds from Operations:
Closing Balance of Reserves Opening Balance of Reserves
Increase in Reserves
Add: Depreciation charged
Add: Premium paid on redemptionOf preference shares Add: loss on sale of machine
| 2,50,000 |
Statement of Sources /Applications of Fund
| Sources | Applications | |
| Share capital Debentures Funds from operation | 50,000 1,00,000 2,50,000 | Redemption of Preference shares 1,00,000 Premium on redemption of Preference shares 5,000 Increase in working capital 1,15,000 Purchase of new fixed Assets 1,80,000 |
| 4,00,000 | 4,00,000 | |
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