) The following is the Balance Sheet of New India
Ltd. for the year ending Dec 31, 2014:
8
Liabilities.
Rs.
Assets
Rs.
Goodwill
1,00,000
9% Preference Share
Capital
5,00,000
Land & Building
6,50,000
Equity Share Capital
10,00,000 Plant
8,00,000
8% Detientures
2,00,000 Furniture
1,50,000
Long-leim Loan
70,000
1,00,000 Bills Receivables
60,000 Debtors
Bills Payable
90,000
Creditors
70,000 Bank Balance
45,000
Bank Overdraft
+30,000 Short-term
Investments
5,000
Outstanding Expenses
25,000
Pre-paid Expensas
5,000
Stock
30,000
3
19,65,000
19,65,000
From the above balance sheet calculate Acid Test ratio and current ratio and absolute ratio
Answers
Explanation:
Cash Flow Statement
Particulars
Amount (Rs.)
Amount (Rs.)
A. Cash Flow from Operating Activities
Surplus as on 31st March 2018
3,20,000
Less: Surplus as on 31st March 2017
(60,000)
2,60,000
Add: Transfer to General Reserve
80,000
Provision for tax created during the year
1,18,000
Profit before tax and extraordinary items
4,58,000
Add: Interest on 12% debentures
50,000
Depreciation for the year
5,000
55,000
Operating Profit Before Working Capital Changes
5,13,000
Less: Increase in the value of trade receivables
(2,90,000)
Cash generated from operations
2,23,000
Less: Tax paid
46,000
Cash Flow from Operating Activities
1,77,000
A. Cash Flow from Investing Activities
Purchase of plant and machinery
(3,50,000)
Purchase of goodwill
(98,000)
Cash used in Investing Activities
(4,88,000)
B. Cash Flow from Financing
Activities
Increase in Bank Overdraft
73,000
Proceeds from issue of 12% Debentures
2,00,000
Proceeds from issue of shares
2,10,000
Interest on 12% debentures
(50,000)
Cash Flow from Financing Activities
4,33,000
C. Net Increase/Decrease in Cash & Cash Equivalents
1,62,000
Add: Cash and Cash Equivalents as on 31st March 2017
Cash and Bank balance
70,000
Current investments
63,000
1,33,000
D. Cash and Cash Equivalents as on 31st March 2018
Cash and Bank balance
1,55,000
Current investments
1,40,000
2,95,000