Question

Cash Flow from the operating activities of Pinnacle Ltd. for the year ended 31st March 2019 was Rs 28,000. The Balance Sheet along with notes to accounts of Pinnacle Ltd. as at 31st March 2019 is given below: 6
Pinnacle Ltd.
Balance Sheet as at 31st March 2019
Particulars
Note No.
31.3.2020
31.3.2019

I. Equity & Liabilities:
1 Shareholders Funds
Share Capital
Reserves &Surplus
2 Non Current Liabilities:
Long term borrowings
3 Current Liabilities:
Trade Payables
Total
II. Assets
1 Non Current Assets:
Fixed Assets:
Tangible Assets
Intangible Assets
2 Current Assets:
Current Investments
Inventories
Cash & Cash Equivalents
TOTAL



1

2






3
4


9,00,000
90,000

3,00,000

60,000
13,50,000



7,46,000
36,000

1,30,000
2,00,000
2,38,000
13,50,000





5,00,000
1,10,000

2,00,000

80,000
8,90,000



5,24,000
76,000

20,000
1,30,000
1,40,000
8,90,000



Notes to Accounts:
Note no.
Particulars
31.3.2020
31.3.2019


Reserves & Surplus
90,000
1,10,000


Long term borrowing:
9% debentures

3,00,000

2,00,000


Tangible Assets:
Plant & Machinery
Accumulated Depreciation

8,86,000
(1,40,000)

6,04,000
(80,000)


Intangible Assets:
Goodwill

36,000

76,000

You are given the following additional information:
A machinery of the book value of Rs 90,000 (depreciation provided there on was Rs 23,000) ,was sold at a profit of Rs 12,000.
9% debentures were issued on 1st April 2019.
Prepare Cash Flow Statement.​

Answer 1

Answer:

Hope it helps you........

Answer 2

Answer

        CASH FLOW STATEMENT FOR THE YEAR 31st MARCH, 2019

Particulars                                                                                    Amount(Rs.)

I) Cash Flow from Operating Activity

Net Profit Before-tax                                                                     (20000)

Adjustments for Non-Cash items

Add: Amortisation of Goodwill                                                       40000

        Depreciation                                                                          83,000

        Interest on debenture                                                           27000

Less: Profit on sale of Machinery                                                 (12000)

Operating profit Before working capital changes                     1,18,000

Less: Increase in Assets

      Inventories                                                                             (70,000)

      Decrease in Liabilities                                                      

      Trade Payables                                                                     (20,000)

(A) NET CASH FLOW FROM OPERATING ACTIVITY                28,000  

II) Cash flow from Investing Activities

Sale of Fixed Assets                                                                    1,02,000

Purchase of Machinery                                                              (3,95,000)        

(B) NET CASH FLOW FROM OPERATING ACTIVITY              (2,93,000)

III) Cash Flow from Financing Activities

Issue of Equity Share Capital                                                       4,00,000

Issue of Long-term Borrowing (9% Debentures)                         1,00,000

Interest on Long-term Borrowing(9% Debentures                     (27,000)

(C) NET CASH FLOW FROM FINANCING ACTIVITY               4,73,000

(D) Net Increase in Cash and Cash Equivalent (A+B+C)          2,08,000

(E) Add: Cash and Cash Equivalent                                            1,60,000

Cash and Cash Equivalent at the end of the year                    3,68,000

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