Management Accounting Chapter 4
FUNDS FLOW STATEMENT
MEANING OF FUND:
It means working capital.
Working capital is the excess of current assets over current liabilities.
MEANING OF FLOW OF FUND:
It means the change in
working capital. It indicates the inflows and outflows of funds.
FUNDS FLOW STATEMENT:
It is a financial report
on movements of funds explaining from where the funds originate and where it is
used during the period. This statement consists of two parts- Sources of funds
and Application of funds. The basic object of this statement is to find out
increase or decrease in working capital during a period by showing sources and
uses of working capital.
PREPARATION OF FUNDS FLOW
STATEMENT:
Generally, fund flow
requires preparation of three statements:
1. Statement showing the
changes in working capital
2. Funds flow statement
3. Profit and loss adjustment
account (optional)
STATEMENT SHOWING CHANGES
IN WORKING CAPITAL/SCHEDULE OF CHANGES IN WORKING CAPITAL/ ANALYSIS OF WORKING
CAPITAL:
Proforma:
|
Particulars
|
P Y amt
|
C Y amt
|
Increase in WC
|
Decrease in WC
|
|
Current assets:
|
|
|
|
|
|
Cash
|
|
|
|
|
|
Bank
|
|
|
|
|
|
Bills receivables
|
|
|
|
|
|
Debtors
|
|
|
|
|
|
Temporary investments
|
|
|
|
|
|
Stock
|
|
|
|
|
|
Prepaid expenses
|
|
|
|
|
|
Outstanding income (etc)
|
|
|
|
|
|
TOTAL CURRENT ASSETS (A)
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Bills payables
|
|
|
|
|
|
Creditors
|
|
|
|
|
|
Outstanding expenses
|
|
|
|
|
|
Bank overdraft
|
|
|
|
|
|
Short term advances
(etc)
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES (B)
|
|
|
|
|
|
WORKING CAPITAL (A) –
(B)
|
|
|
|
|
|
Net increase or decrease
in working capital
(to be transferred to
FFS)
|
|
|
|
|
|
Total
|
|
|
|
|
Remember:
1.
Consider only the balance
sheets for preparation of this statement and ignore all the additional
information.
2.
For current assets increase
in assets means increase in working capital and decrease in assets means
decrease in working capital. Similarly for current liabilities increase in
liabilities means decrease in working capital and decrease in liabilities means
increase in working capital.
PROFIT AND LOSS ADJUSTMENT
ACCOUNT:
Proforma:
|
Particulars
|
Debit amount
|
Particulars
|
Credit amount
|
|
To depreciation
|
|
By opening balance of
P&L A/C
|
|
|
To share discount
written off
|
|
By dividend received
|
|
|
To goodwill written off
|
|
By excess provision
written back
|
|
|
To premium of redemption
|
|
By funds from operations
(bal fig)
(to be transferred to
FFS)
|
|
|
To transfer to general
reserve
|
|
|
|
|
To transfer to other
reserves
|
|
|
|
|
To loss on sale of fixed
assets
|
|
|
|
|
To tax provision
|
|
|
|
|
To dividend provision
|
|
|
|
|
To closing balance of
P&L A/C
|
|
|
|
|
Total
|
|
Total
|
|
Remember:
1.
P&L Adjustment account
is not the part of the FFS but it is necessary to prepare it to calculate the
amount of FFO. It is not the integral part of the main answer and can be shown
in the working notes also.
2.
It can be prepared in the statement
form also.
3.
Opening and closing
balances are taken from the balance sheet liability side Profit and Loss
Appropriation Account.
FUNDS FLOW STATEMENT:
Proforma:
|
Sources of funds
|
Amount
|
Application of funds
|
Amount
|
|
Funds from operation (cr
bal)
|
|
Funds from operation (dr
bal)
|
|
|
Issue of equity shares
|
|
Redemption of preference
shares
|
|
|
Issue of debentures
|
|
Redemption of debentures
|
|
|
Issue of preference
shares
|
|
Repayment of long term
borrowings
|
|
|
Long term borrowings
|
|
Purchase of fixed assets
|
|
|
Sale of fixed assets
|
|
Premium on redemption
|
|
|
Premium on issue
|
|
Net increase in WC
|
|
|
Net decrease in WC
|
|
|
|
|
Total
|
|
Total
|
|
PRACTICAL EXAMPLES OF FUNDS FLOW STATEMENT
1. The following are the
summarized BS of K Ltd as at 31st December 2010 and 2011
|
Liabilities
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Equity
shares
|
100000
|
100000
|
Fixed
Assets
|
95000
|
120000
|
|
Preference
shares
|
|
50000
|
Investments
|
|
10000
|
|
General
Reserve
|
30000
|
40000
|
Stock
|
40000
|
60000
|
|
Profit
& Loss
|
25000
|
70000
|
Debtors
|
20000
|
40000
|
|
Creditors
|
20000
|
10000
|
Bills
Receivables
|
5000
|
2000
|
|
Bills
Payables
|
|
2000
|
Prepaid
expenses
|
5000
|
18000
|
|
Overdraft
|
3000
|
|
Cash
|
20000
|
10000
|
|
Provision
for taxation
|
7000
|
12000
|
Advances
|
10000
|
40000
|
|
Proposed
dividend
|
10000
|
16000
|
|
|
|
|
Total
|
195000
|
300000
|
Total
|
195000
|
300000
|
You are required to prepare a
statement showing changes in WC.
2. A company reported current
profit of Rs. 70,000 after incorporating the following:
·
Loss
on sale of equipment – 10000
·
Premium
on redemption of debentures – 1500
·
Discount
on issue of debentures – 2000
·
Depreciation
on fixed assets – 20000
·
Depletion
of natural resources – 10000
·
Amortization
of goodwill – 30000
·
Interim
dividend – 25000
·
Gain
from sale of non current assets – 40000
·
Excess
provision for taxation – 22000
·
Dividend
income on investment – 4000
·
Transfer
to general reserve – 5000
·
Preliminary
expenses – 1000
·
Profit
on revaluation of investments – 2500
Derive the net inflow of
FFO
3. Calculate FFO from the
following information as at 31st Dec 2011:
·
Increase
in P&L A/c during the year ended 31-3-2011 – Rs. 650000
·
Gain
on sale of building – Rs. 35000
·
Goodwill
appears in the books as on 1-1-2011 at Rs. 180000 of which 10% has been written
off during the year
·
Old
machinery of Rs. 8000 has been sold during the year for Rs. 6500
·
Rs.
125000 have been transferred to General reserve
·
Depreciation
has been provided during the year on machinery at 20% on WDV of Rs. 520000
4. Calculate FFO from the
following:
|
Particulars
|
Amount
|
|
Net
profit after tax
|
150000
|
|
Provision
for depreciation
|
5000
|
|
Provision
for taxation
|
100000
|
|
Refund
of tax
|
1500
|
|
Profit
on sale of fixed assets
|
2000
|
|
Loss
on sale of investments
|
5000
|
|
Interest
received
|
1500
|
|
Rent
received
|
1000
|
|
Dividend
income
|
5000
|
|
Discount
allowed in debentures written off
|
1000
|
|
Cost
of issue of shares written off
|
500
|
|
Preliminary
expenses written off
|
800
|
|
Goodwill
written off
|
1000
|
|
Underwriting
commission written off
|
500
|
5. From the following details
calculate FFO
·
Depreciation
on Plant was Rs 4000 and on building was Rs 3000
·
Provision
for taxation was of Rs 19000
·
Interim
dividend of Rs 8000 was paid during the year
·
Opening
balance of GR & P&L A/C were Rs 14000 and Rs 10000 respectively and the
closing balances were Rs 18000 and Rs 13000 respectively
6. From the following
information calculate FFO as on 30-03-2012
|
Particulars
|
31-3-2011
|
31-3-2012
|
|
GR
|
78000
|
89000
|
|
GW
|
34000
|
23000
|
|
Preli
Exp
|
12000
|
3000
|
|
Dep
fund
|
33000
|
44000
|
|
BDR
|
2000
|
3000
|
|
P&L
A/c (Cr. Bal)
|
123000
|
136000
|
7. From the following BS of A
Ltd as at 31st March 2010 & 2011, Prepare FFS
|
Liabilities
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
10%
Pref sh
|
200000
|
220000
|
Mach
|
400000
|
460000
|
|
Eq
sh
|
440000
|
500000
|
Bldg
|
300000
|
352000
|
|
Sh
prem
|
40000
|
52000
|
Land
|
36000
|
36000
|
|
P&L
a/c
|
208000
|
268000
|
Cash
|
84000
|
64000
|
|
12%
Deb
|
140000
|
128000
|
Drs
|
76000
|
76000
|
|
Crs
|
76000
|
92000
|
BR
|
84000
|
124000
|
|
BP
|
10000
|
8000
|
Stock
|
168000
|
196000
|
|
Tax
pro
|
20000
|
24000
|
|
|
|
|
Prop
Div
|
14000
|
16000
|
|
|
|
|
Total
|
1148000
|
1308000
|
Total
|
1148000
|
1308000
|
8. Prepare a statement of
changes in WC from the following BSs of S company:
|
Liabilities
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Equity
|
500000
|
500000
|
FA
|
600000
|
700000
|
|
Deb
|
370000
|
450000
|
LT
Inv
|
200000
|
100000
|
|
Tax
payable
|
77000
|
43000
|
WIP
|
80000
|
90000
|
|
Crs
|
96000
|
192000
|
Stock
|
150000
|
225000
|
|
Interest
payable
|
37000
|
45000
|
Drs
|
70000
|
140000
|
|
Dividend
Payable
|
50000
|
35000
|
Cash
|
30000
|
10000
|
|
Total
|
1130000
|
1265000
|
Total
|
1130000
|
1265000
|
9. The following are the BSs
of H Ltd
|
Liabilities
|
31.3.2011
|
31.3.2012
|
Assets
|
31.3.2011
|
31.3.2012
|
|
Equity
(fv-10)
|
100000
|
150000
|
FA
|
130000
|
223000
|
|
GR
|
60000
|
20000
|
Inv
|
15000
|
12000
|
|
P&L
|
10000
|
12000
|
Stock
|
10000
|
15000
|
|
10%
Deb
|
|
50000
|
Drs
|
55000
|
35000
|
|
Crs
|
45000
|
51000
|
Cash
& Bank
|
12000
|
9000
|
|
Tax
Pro
|
15000
|
17000
|
Preli
Exp
|
8000
|
6000
|
|
Total
|
230000
|
300000
|
Total
|
230000
|
300000
|
Additional information:
·
On
1.1.11 bonus shares at 1 for every 2 were issued utilizing GR
·
IT
paid during the year Rs 14000
·
Int
Div paid during the year Rs 9000
·
Dep
of Rs. 5000 was provided on FA
·
Inv
costing Rs. 5000 were sold at a profit of Rs. 1000 and profit was credited to
P&L A/c.
Prepare a statement of
changes in WC and FFS
10. Following are the BSs of U
Ltd:
|
Liab
|
31.3.11
|
31.3.12
|
Assets
|
31.3.11
|
31.3.12
|
|
Equity
(FV 10)
|
200000
|
300000
|
FA
|
260000
|
446000
|
|
GR
|
120000
|
40000
|
Inv
|
30000
|
24000
|
|
P&L
A/c
|
20000
|
24000
|
Stock
|
20000
|
30000
|
|
10%
Deb
|
|
100000
|
Drs
|
110000
|
70000
|
|
Crs
|
90000
|
102000
|
Cash
& Bank
|
24000
|
18000
|
|
Tax
Pro
|
30000
|
34000
|
Preli
Exp
|
16000
|
12000
|
|
Total
|
460000
|
600000
|
Total
|
460000
|
600000
|
Additional information:
·
IT
of Rs 28000 paid during the year
·
Int
Div of Rs 18000 paid during the year
·
Dep
of Rs 10000 was provided on FA
·
Inv
costing Rs 10000 sold at a profit of Rs 2000 and profit was credited to P&L
A/c
From the above info,
prepare FFS and a statement showing changes in WC
11. Following are the
summarized BSs of G Ltd:
|
Liab
|
31.3.11
|
31.3.12
|
Assets
|
31.3.11
|
31.3.12
|
|
Equity
|
150000
|
200000
|
GW
|
50000
|
40000
|
|
9%
Red Pref Sh
|
75000
|
50000
|
Land
|
100000
|
85000
|
|
CR
|
|
10000
|
Plant
|
40000
|
100000
|
|
GR
|
20000
|
25000
|
Inv
|
10000
|
15000
|
|
P&L
A/c
|
15000
|
24000
|
Drs
|
70000
|
85000
|
|
Prop
Div
|
21000
|
25000
|
Stock
|
39000
|
55000
|
|
Crs
|
13000
|
24000
|
BR
|
10000
|
15000
|
|
BP
|
10000
|
8000
|
Cash
|
7000
|
5000
|
|
O/S
Exp
|
15000
|
18000
|
Bank
|
5000
|
4000
|
|
Tax
pro
|
20000
|
25000
|
Preli
exp
|
8000
|
5000
|
|
Total
|
339000
|
409000
|
Total
|
339000
|
409000
|
Additional information:
·
A
part of land was sold out in 2012 and profit was credited to CR
·
Mach
has been sold for 5000 (WDV – 6000) Dep of Rs. 5000 was charged on plant
·
Interim
dividend of Rs. 10000 was paid
·
An
amount of 41000 has been received by way of Div on Inv in 2012
Prepare FFS
12. Prepare a statement
showing sources & application of funds after taking into account the BSs
& additional information given below.
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Equity
|
200000
|
250000
|
GW
|
30000
|
27000
|
|
Sec
Prem
|
10000
|
15000
|
L&B
|
90000
|
140000
|
|
GR
|
35000
|
40000
|
Mach
|
130000
|
150000
|
|
P&L
A/c
|
25000
|
90000
|
Furni
|
15000
|
13500
|
|
6%
Deb
|
100000
|
100000
|
Patents
|
50000
|
45000
|
|
Crs
|
30000
|
40000
|
Drs
|
45000
|
70000
|
|
Tax
pro
|
18000
|
15000
|
Cash
|
5800
|
7000
|
|
|
|
|
Stock
|
50000
|
96000
|
|
|
|
|
Deb
Disc
|
1200
|
1000
|
|
|
|
|
Preli
Exp
|
1000
|
500
|
|
Total
|
418000
|
550000
|
Total
|
418000
|
550000
|
Additional information:
·
Depreciation
W/O L&B 9000, Mach 13000, Patents 5000, Furni 1500
·
During
the year Mach of 20000 was sold at 15000
·
During
the year taxes & div paid were 10000 & 20000 respectively.
13. From the following BSs
& other Info of P Ltd prepare FFS & analysis of WC
|
Liab
|
2011
|
2012
|
Assets
|
2011
|
2012
|
|
Sh
Cap
|
200000
|
250000
|
GW
|
7500
|
5000
|
|
GR
|
10000
|
25000
|
Bldg
|
142500
|
157500
|
|
P&L
A/c
|
15000
|
50000
|
P&M
|
93000
|
75000
|
|
12%
Deb
|
200000
|
235000
|
LT
Inv
|
75000
|
75000
|
|
Crs
|
125000
|
60000
|
Stock
|
200000
|
180000
|
|
BP
|
75000
|
40000
|
Drs
|
150000
|
165000
|
|
Prop
Div
|
40000
|
40000
|
Cash
|
6250
|
12500
|
|
Tax
pro
|
60000
|
50000
|
Bank
|
50750
|
80000
|
|
Total
|
725000
|
750000
|
Total
|
725000
|
750000
|
Addnl info:
·
During
the year investment costing 20000 were sold @ profit of 10000
·
Interim
dividend of 25000 was paid during the year
·
Taxes
paid 60000
·
15000
was charged as depri on bldg
·
Depri
on P&M 9300
14. From the following BSs of
J Ltd prepare FFS
|
Liab
|
31.3.11
|
31.3.12
|
Assets
|
31.3.11
|
31.3.12
|
|
Equity
|
600000
|
800000
|
L&B
|
180000
|
220000
|
|
P&L
A/C
|
100000
|
160000
|
P&M
|
500000
|
800000
|
|
GR
|
50000
|
70000
|
Stock
|
100000
|
85000
|
|
Tax
Pro
|
50000
|
40000
|
BR
|
50000
|
30000
|
|
Crs
|
110000
|
130000
|
Drs
|
150000
|
160000
|
|
BP
|
80000
|
90000
|
Cash
|
20000
|
20000
|
|
O/S
Rent
|
10000
|
25000
|
|
|
|
|
Total
|
1000000
|
1315000
|
Total
|
1000000
|
1315000
|
Adnl info:
·
Depri
on P&M 50000
·
A
piece of Mach costing 12000 was sold for 8000 (dep of 7000 had been provided on
it)
·
Interim
dividend of 6000 paid during the year
·
IT
paid during the year 45000
15. Following are the BSs of
AK Ltd: Prepare FFS & Statement of changes in WC
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Sh
Cap
|
200000
|
250000
|
L&B
|
200000
|
190000
|
|
GR
|
50000
|
60000
|
P&M
|
150000
|
169000
|
|
P&L
A/C
|
30500
|
30600
|
Stock
|
100000
|
74000
|
|
Bank
Loan
|
70000
|
|
Drs
|
80000
|
64000
|
|
Crs
|
150000
|
135000
|
Cash
|
500
|
600
|
|
Tax
Pro
|
30000
|
35000
|
Bank
|
|
8000
|
|
|
|
|
GW
|
|
5000
|
|
Total
|
530500
|
510600
|
Total
|
530500
|
510600
|
Adnl Info:
·
Div
of Rs 23000 was paid
·
Assets
of another company were purchased for a consideration of Rs 50000 payable in shares. Assets purchased were Stock Rs 20000 &
Mach Rs 25000
·
Mach
purchased Rs 8000
·
Dep
W/O: Bldg Rs 10000 & Mach Rs. 14000
·
IT
paid during the year 28000. provision of Rs 33000 was charged to P&L A/c
16. The following are the
summarized BSs of KA Ltd as on 31-3-2011 & 31-3-2012:
|
Liab
|
2011
|
2012
|
Assets
|
2011
|
2012
|
|
Sh
Cap
|
450000
|
450000
|
FA
|
400000
|
320000
|
|
GR
|
300000
|
310000
|
Inv
|
50000
|
60000
|
|
P&L
A/C
|
56000
|
68000
|
Stock
|
240000
|
210000
|
|
Mortgage
Loan
|
|
270000
|
Drs
|
210000
|
455000
|
|
Crs
|
168000
|
134000
|
Bank
|
149000
|
197000
|
|
Tax
Pro
|
75000
|
10000
|
|
|
|
|
Total
|
1049000
|
1242000
|
Total
|
1049000
|
1242000
|
Adnl info:
·
Investment
costing 8000 were sold during the year for 8500. Further investments of 1800
were purchased during the year
·
Net
profit for the year was Rs 62000 after charging Depri on FA 70000 & Tax
Prov Rs 10000
·
During
the year a part of FA costing Rs 10000 was disposed off for 12000 and profit
was included in P&L A/c
·
Dividend
paid during the year amounted to 40000
Prepare statement showing
changes in WC and FFS
17. The BSs of Hardwork Ltd
for 2010 & 2011 were as follows. Prepare FFS
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Equity
Cap
|
100000
|
150000
|
Freehold
land
|
100000
|
100000
|
|
Sh
prem
|
|
5000
|
Plant
|
104000
|
100000
|
|
GR
|
50000
|
60000
|
Furni
|
7000
|
9000
|
|
P&L
A/C
|
10000
|
17000
|
Investment
|
60000
|
80000
|
|
Prov
for Dep on Plant
|
50000
|
52000
|
Drs
|
30000
|
70000
|
|
Prov
for dep on Furni
|
5000
|
6000
|
Stock
|
60000
|
65000
|
|
Crs
|
86000
|
95000
|
Cash
|
30000
|
45000
|
|
Total
|
391000
|
469000
|
Total
|
391000
|
469000
|
A plant purchased for Rs
4000 (Dep Rs 2000) was sold for cash for Rs 800 on 30.9.2011. On 30.6.2011 an
item of Furni was purchased for Rs 2000. Dividend on Equity share capital was
paid. Prepare SWC & FFS
18. From the following BSS of
Honesty Lts prepare FFS & SWC
|
Liab
|
2012
|
2011
|
Assets
|
2012
|
2011
|
|
Eq
Cap
|
350000
|
250000
|
GW
|
50000
|
60000
|
|
P&L
A/C
|
165000
|
130000
|
FA
|
395000
|
290000
|
|
Prop
Div
|
35000
|
20000
|
CA
|
285000
|
190000
|
|
Tax
pro
|
60000
|
50000
|
|
|
|
|
CL
|
120000
|
90000
|
|
|
|
|
Total
|
730000
|
540000
|
Total
|
730000
|
540000
|
Adnl Info:
a.
Depri
on FA provided during the year Rs 30000, IT Paid Rs 50000, Final Div paid Rs
20000, Interim Div Paid Rs 10000
b.
FA
costing 60000 (accumulated Dep 35000) sold for 30000
c.
FA
costing 50000 was purchased by issue of Sh Cap
19. From the following BSs of
Decency Ltd, prepare SWC & FFS
|
Liab
|
2011
|
2012
|
Assets
|
2011
|
2012
|
|
Eq
Sh
|
300000
|
400000
|
GW
|
115000
|
90000
|
|
Red
Pref Sh
|
150000
|
100000
|
L&B
|
200000
|
170000
|
|
GR
|
40000
|
70000
|
Plant
|
80000
|
200000
|
|
P&L
A/C
|
30000
|
43000
|
Stock
|
77000
|
109000
|
|
Crs
|
55000
|
83000
|
BR
|
20000
|
30000
|
|
BP
|
20000
|
16000
|
Cash
|
15000
|
19000
|
|
Prop
Div
|
42000
|
50000
|
Bank
|
10000
|
8000
|
|
Tax
pro
|
40000
|
50000
|
Drs
|
160000
|
200000
|
|
Total
|
677000
|
817000
|
Total
|
677000
|
817000
|
Adnl info:
·
Depri
of Rs 10000 and Rs 20000 have been charged on Plant and L&B respectively
·
Div
of Rs 20000 paid
·
IT
of Rs 35000 paid
20. From the following prepare
SWC & FFS
|
Liab
|
1st
year
|
2nd
year
|
Assets
|
1st
year
|
2nd
year
|
|
Equity
|
450000
|
600000
|
GW
|
190000
|
140000
|
|
6%
Red Pref Sh
|
225000
|
150000
|
Plant
|
160000
|
250000
|
|
P&L
A/C
|
60000
|
75000
|
Bldg
|
240000
|
195000
|
|
Prop
Div
|
55000
|
67000
|
Stock
|
92000
|
125000
|
|
Crs
|
72000
|
90000
|
Drs
|
175000
|
235000
|
|
BP
|
32000
|
25000
|
BR
|
45000
|
57000
|
|
Tax
Prov
|
60000
|
72000
|
Cash
|
52000
|
77000
|
|
Total
|
954000
|
1079000
|
Total
|
954000
|
1079000
|
Adnl Info:
·
Interim
Div of Rs 35000 paid in 2nd year
·
IT
paid 52000
·
Dep
of 35000 & 42000 charged on Plant & Bldg respectively
21. The following are the BSs
of Patience Ltd for 2010 & 2011
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Equity
|
900000
|
105000
|
FA
|
1530000
|
1860000
|
|
8%
Pref Sh
|
600000
|
300000
|
Inv
|
90000
|
240000
|
|
Deb
|
300000
|
600000
|
CA
|
720000
|
1125000
|
|
P&L
A/c
|
330000
|
810000
|
Deb
Disc
|
30000
|
15000
|
|
CL
|
240000
|
480000
|
|
|
|
|
Total
|
2370000
|
3240000
|
Total
|
2370000
|
3240000
|
Adnl
info:
·
Mach
costing 120000 was sold for 75000
·
Redemption
at a premium of 15% was done for Pref Sh on 31.12.2011
·
Eq
shareholders were paid dividend @ 15% for 2010
·
Depri
charged on FA Rs 180000 during the year.
22. Following are the
comparative BSs of Being Human:
|
Liab
|
2011
|
2012
|
Assets
|
2011
|
2012
|
|
Sh
Cap
|
1000000
|
1100000
|
GW
|
50000
|
40000
|
|
Deb
|
500000
|
300000
|
L&B
|
420000
|
660000
|
|
GR
|
200000
|
200000
|
P&M
|
600000
|
800000
|
|
P&L
A/C
|
110000
|
190000
|
Stock
|
250000
|
210000
|
|
IT
Pro
|
40000
|
110000
|
Drs
|
300000
|
240000
|
|
Crs
|
50000
|
40000
|
Cash
|
300000
|
240000
|
|
BP
|
20000
|
30000
|
Preli
Exp
|
30000
|
20000
|
|
Prov
for doubtful debts
|
30000
|
24000
|
|
|
|
|
Total
|
1950000
|
1994000
|
Total
|
1950000
|
1994000
|
Adnl info:
·
During
the year 2012, a part of machinery costing Rs 7500 (accumulated depri thereon
being 2500) was sold for Rs 3000
·
Div
of Rs 100000 paid during the year
·
Depri:
L&B – 10000 & P&M – 50000
·
IT
of 50000 was paid during the year
Prepare Schedule of
changes in WC and a statement showing flow of funds
23. From the following BSs
& adnl info you are required to calculate FFO
|
Particulars
|
1-1-2010
|
31-12-2010
|
|
Sh
Cap
|
100000
|
150000
|
|
GR
|
30000
|
30000
|
|
P&L
A/C
|
20000
|
22000
|
|
6%
Deb
|
80000
|
80000
|
|
Crs
|
65000
|
58000
|
|
Tax
Pro
|
5000
|
10000
|
|
Total
|
300000
|
350000
|
|
L&B
|
100000
|
95000
|
|
P&M
|
80000
|
90000
|
|
Stock
|
70000
|
110000
|
|
Drs
|
20000
|
25000
|
|
Inv
|
|
10000
|
|
Cash
|
10000
|
10000
|
|
GW
|
20000
|
10000
|
|
Total
|
300000
|
350000
|
Adnl info:
·
Dividend
of Rs 15000 were paid during the year
·
Depri
w/o P&M amounted to Rs 6000 & no dep has been charged on L&B
·
Pro
for tax made during the year Rs 5000
·
Profit
on sale of mach was Rs 2000
24. BSs of Success for the
year ended 31-12 are given below:
|
Liab
|
2010
|
2012
|
Assets
|
2010
|
2012
|
|
Sh
Cap
|
720000
|
840000
|
FA
|
1200000
|
1440000
|
|
GR
|
240000
|
300000
|
Less:
Acc Dep
|
240000
|
300000
|
|
CR
|
|
12000
|
Net
FA
|
960000
|
1140000
|
|
P&L
A/C
|
120000
|
240000
|
Inv
|
216000
|
216000
|
|
7%
Deb
|
360000
|
240000
|
Inventory
|
240000
|
324000
|
|
Crs
for Exp
|
12000
|
14400
|
Drs
|
270000
|
294000
|
|
Crs
for goods
|
192000
|
300000
|
BR
|
48000
|
78000
|
|
Prop
Div
|
36000
|
42000
|
P/P
Exp
|
12000
|
14400
|
|
Tax
Pro
|
84000
|
90000
|
Misc
Exp
|
18000
|
12000
|
|
Total
|
1764000
|
2078400
|
Total
|
1764000
|
2078400
|
Adnl info:
·
During
the year, FA, WDV Rs 12000(Dep w/o Rs 36000) were sold for Rs 9600
·
Prop
Div of last year was paid
·
During
the year, inv costing Rs 96000 were sold and later in the year, inv of the same
cost were purchased
·
Deb
were redeemed @ prem of 10%
·
Liab
for Tax came to Rs 66000 for the year 2009
·
During
the year, BD Rs 18000 were w/o against provision account
Prepare FFS
25. From the following BSs
prepare FFS
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Sh
Cap
|
200000
|
300000
|
Bldg
|
150000
|
230000
|
|
Sh
Prem
|
|
10000
|
P&M
|
260000
|
320000
|
|
CR(Pft
on Red of Deb)
|
|
1000
|
-dep
|
85000
|
95000
|
|
P&L
A/C: Bal BF
|
40000
|
40000
|
Net
P&M
|
175000
|
225000
|
|
Profit
for the year
|
|
45000
|
Sh
in Sub Co
|
20000
|
20000
|
|
5%
Deb
|
100000
|
75000
|
Stock
|
45000
|
49000
|
|
Crs
|
60000
|
75000
|
Drs
|
15000
|
18000
|
|
Taxation
account
|
20000
|
5000
|
Bank
|
25000
|
48000
|
|
Prop
Div
|
10000
|
10000
|
|
|
|
|
Total
|
430000
|
590000
|
Total
|
430000
|
590000
|
During the year plant
costing 15000, accumulated depri thereon Rs 8000 was sold for Rs 5000. The loss
on sale being charged to P&L A/c
26. The following are the
summarized BSs of Creativity Ltd Company as at 31st Dec, 2010 &
2011. you are required to prepare a FFS and Schedule settling out changes in WC
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Crs
|
39500
|
41135
|
Cash
|
2500
|
2700
|
|
BP
|
33780
|
11525
|
Drs
|
85175
|
72625
|
|
BOD
|
59510
|
|
Advances
|
2315
|
735
|
|
Tax
Pro
|
40000
|
50000
|
Stock
|
111040
|
97370
|
|
Reserves
|
50000
|
50000
|
L&B
|
148500
|
144250
|
|
P&L
|
39690
|
51220
|
P&M
|
112950
|
116200
|
|
Sh
Cap
|
200000
|
260000
|
GW
|
|
20000
|
|
Total
|
462480
|
453880
|
Total
|
462480
|
453880
|
Adnl info:
·
Interim
Div of 26000 was paid
·
Assets
of another co were purchased for 60000 payable in fully paid shares of the
company. These assets consisted of Stock – 21640 & Mach – 18360 & GW –
20000. In addition purchases of plant were made totaling 5650
·
IT
paid 25000
·
NP
for the year before tax 62530
27. Following is the
summarized BSs & Inc Stat of Excellent Ltd. You are required to prepare a
statement of changes in WC & FFS
Balance Sheets of
Excellent Ltd
|
Particulars
|
31-12-2010
|
31-12-2011
|
|
FA:
L&B
|
96000
|
192000
|
|
P&M
|
720000
|
1152000
|
|
CA:
Cash
|
120000
|
144000
|
|
Drs
|
336000
|
372000
|
|
Stock
|
528000
|
192000
|
|
Advances
|
15600
|
18000
|
|
Total
|
1815600
|
2070000
|
|
Cap
|
720000
|
888000
|
|
P&L
|
303600
|
327600
|
|
Crs
|
480000
|
468000
|
|
O/S
Exp
|
48000
|
96000
|
|
IT
payable
|
24000
|
26400
|
|
Acc
dep on P&M
|
240000
|
264000
|
|
Total
|
1815600
|
2070000
|
Cost of Equipment sold was 144000
Income Statement for year ending 2011
|
Particulars
|
Amount
|
|
Net
sales
|
5040000
|
|
-
Cost of Sales
|
3960000
|
|
-
Depreciation
|
120000
|
|
-
Salaries & wages
|
480000
|
|
-
Operating expenses
|
160000
|
|
-
Prov for Tax
|
176000
|
|
+
Profit on sale of Equipment
|
24000
|
|
+
Retained earnings
|
303600
|
|
+
Profit Brought Down
|
471600
|
|
-
Dividend declared & paid
|
144000
|
|
|
327600
|
28. The following are the
summarized BSs of Mr. Intelligent as at 31-12-2010 & 2011
|
Liab
|
2010
|
2011
|
Assets
|
2010
|
2011
|
|
Sh
Cap
|
500000
|
500000
|
L&B
|
200000
|
250000
|
|
P&L
A/C
|
150000
|
252000
|
P&M
|
350000
|
360000
|
|
Deb
|
200000
|
200000
|
Drs
|
147000
|
138000
|
|
Pro
for doubtful debts
|
5000
|
4000
|
Stock
|
250000
|
274000
|
|
Pro
for dep on L&B
|
30000
|
34000
|
Bank
|
83000
|
101000
|
|
Pro
for dep on Mach
|
30000
|
32000
|
Preli
Exp
|
5000
|
4000
|
|
Total
|
1035000
|
1127000
|
Total
|
1035000
|
1127000
|
Adnl info:
·
The
NP for the year ending 31-12-2011 was Rs 252000 and is arrived at after
charging loss of Mach and W/O Preli Exp and adjusting provisions for doubtful
debts
·
During
the year, a part of Mach costing Rs 7000, accumulated Dep thereon being Rs 1000
was sold for Rs 5000
·
Dividend
of Rs 50000 was paid during the year ended 31-12-2011
Prepare statements to show
the changes in WC for the year 2011 & the sources & application of
funds for 2011
29. From the following BSs
prepare statement of changes in WC & FFS
|
Liab
|
2009
|
2010
|
Assets
|
2009
|
2010
|
|
Equity
|
300000
|
400000
|
GW
|
100000
|
80000
|
|
8%Red
Pref Cap
|
150000
|
100000
|
L&B
|
200000
|
170000
|
|
CR
|
10000
|
20000
|
P&M
|
80000
|
200000
|
|
GR
|
30000
|
50000
|
Inv
|
20000
|
30000
|
|
P&L
A/C
|
30000
|
48000
|
Drs
|
140000
|
170000
|
|
Prop
Div
|
42000
|
50000
|
Stock
|
77000
|
109000
|
|
Crs
|
25000
|
47000
|
BR
|
20000
|
30000
|
|
BP
|
20000
|
16000
|
Cash
|
15000
|
10000
|
|
O/S
Exp
|
30000
|
36000
|
Bank
|
10000
|
8000
|
|
Tax
Pro
|
40000
|
50000
|
Preli
Exp
|
15000
|
10000
|
|
Total
|
677000
|
817000
|
Total
|
677000
|
817000
|
Adnl info:
·
A
piece of land had been sold out in 2010 and the profit on sale has been
credited to CR
·
A
machine had been sold for 10000. the WDV was 12000 & Depri of 10000 is
charged on P&M A/C
·
The
investments are trade investments. 3000 by way of dividend is received
including 1000 from pre acquisition profit which has been credited to
Investment Account
·
An
interim dividend of 20000 has been paid.
30. Consider the following BSs
of a company
|
Liab
|
2011
|
2012
|
Assets
|
2011
|
2012
|
|
Sh
Cap
|
200000
|
250000
|
FA
|
350000
|
475000
|
|
Retained
Earnings
|
160000
|
300000
|
Inventory
|
100000
|
95000
|
|
Premium
on shares
|
|
5000
|
Accounts
receivables
|
43000
|
50000
|
|
Accumulated
dep
|
80000
|
60000
|
P/P
Exp
|
4000
|
5000
|
|
Deb
|
60000
|
|
Cash
|
15800
|
10200
|
|
Accounts
Payables
|
37800
|
40200
|
Comm.
On shares
|
25000
|
20000
|
|
Total
|
537800
|
655200
|
Total
|
537800
|
655200
|
Adnl info:
·
Net
Income for the tear was Rs 140000
·
An
addition to fixed asset was made during the year at a cost of Rs 165000 and
fully depreciated machinery costing Rs 40000 was discarded, no salvage being
realized.
·
Depreciation
for the year 20000
·
IT
paid was Rs 40000
·
Interim
Div paid during the year 20000
You are required to do the analysis of WC &
prepare FFS
- - - T H E – E N D - - -
