1 management accounting - dr. varadraj bapat, iit mumbai cash flow statement proforma and problems

1Management Accounting - Dr. Varadraj Bapat, IIT Mumbai

Cash Flow Cash Flow StatementStatement

Proforma and ProblemsProforma and Problems


IntroductionIntroductionCash Flow formatCash Flow format

Cash Flow ProblemsCash Flow Problems


Cash Generated Cash Generated from Operationsfrom Operations

Retained EarningRetained Earning XXXX

DividendDividend XXXX

Net Profit After TaxNet Profit After Tax XXXX

Add: Provision for TaxAdd: Provision for Tax XXXX

Net Profit Before TaxNet Profit Before Tax XXXX

Add: Non-cash ExpensesAdd: Non-cash Expenses

DepreciationDepreciation XXXX

Amortisation (Goodwill w/o)Amortisation (Goodwill w/o) XXXX


Adjust: Non-operating itemsAdjust: Non-operating items XXXX

Loss on sale of Asset/InvestmentLoss on sale of Asset/Investment XXXX

Interest expensesInterest expenses XXXX

Interest/ Dividend IncomeInterest/ Dividend Income (XX)(XX)

Profit on sale of Asset/ Profit on sale of Asset/ InvestmentInvestment

(XX)(XX)

Funds from OperationsFunds from Operations XXXX


Adjust: Working Capital ItemsAdjust: Working Capital Items XXXX

Decrease in Current AssetDecrease in Current Asset XXXX

Increase in Current LiabilitiesIncrease in Current Liabilities XXXX

Increase in Current AssetIncrease in Current Asset (XX)(XX)

Decrease in Current LiabilitiesDecrease in Current Liabilities (XX)(XX)

Cash generated from operationCash generated from operation XXXX

Income Tax PaidIncome Tax Paid (XX)(XX)

Cash flow from operating activitiesCash flow from operating activities XXXX


Cash Flow from Investing ActivitiesCash Flow from Investing Activities

Purchase of Assets / InvestmentPurchase of Assets / Investment (XX)(XX)

Sale of Assets / InvestmentSale of Assets / Investment XXXX

Interest / Dividend receivedInterest / Dividend received XXXX

Investment in joint ventureInvestment in joint venture (XX)(XX)

Cash flows from investing activitiesCash flows from investing activities XXXX


Cash Flow from Financing ActivitiesCash Flow from Financing Activities

Issue of shares/ debentures for cashIssue of shares/ debentures for cash XXXX

Redemption of Preference shares/ Redemption of Preference shares/ debenturesdebentures

(XX)(XX)

Interest / Dividend paidInterest / Dividend paid (XX)(XX)

Proceeds from borrowingsProceeds from borrowings XXXX

Repayment of loanRepayment of loan (XX)(XX)

Cash flows from financing activitiesCash flows from financing activities XXXX


Cash Flow Cash Flow StatementStatement

1. Cash Flow from Operating Activities1. Cash Flow from Operating Activities XXXX

2. Cash Flow from Investing Activities2. Cash Flow from Investing Activities XXXX

3. Cash Flow from Financing Activities3. Cash Flow from Financing Activities XXXX

Net Increase / decrease in cashNet Increase / decrease in cash (1+2+3)(1+2+3)

XXXX

Cash & Cash Equivalents at the beginningCash & Cash Equivalents at the beginning XXXX

Cash & Cash Equivalents at the endCash & Cash Equivalents at the end XXXX


Cash & Cash Cash & Cash EquivalentsEquivalents

at at BeginningBeginning

at at

EndEnd

CashCash XXXX XXXX

BankBank XXXX XXXX

Short Term InvestmentShort Term Investment XXXX XXXX

TotalTotal XXXX XXXX


Exercise 1.Exercise 1. Prepare cash flow statement from Prepare cash flow statement from

the following details of the the following details of the Narendra Ltd.Narendra Ltd.

Profit and Loss A/c for the year Profit and Loss A/c for the year ending 31 March 2010 is as followsending 31 March 2010 is as follows

SalesSales 200000200000

InterestInterest 1500015000


Total IncomeTotal Income 215000215000

PurchasePurchase 7000070000

WagesWages 2800028000

InterestInterest 1400014000

DepreciationDepreciation 90009000

Office ExpOffice Exp 3000030000

Goodwill written offGoodwill written off 1100011000

TaxTax 3700037000

DividendDividend 30003000

Net profitNet profit 1300013000


20092009 20102010

LiabilitiesLiabilities

Share CapitalShare Capital 160000160000 190000190000

General ReserveGeneral Reserve 5000050000 5000050000

Profit and Loss A/cProfit and Loss A/c 90009000 2200022000

DebenturesDebentures 8000080000 5100051000

CreditorsCreditors 2000020000 4000040000

Proposed DividendProposed Dividend 20002000 30003000

321000321000 356000356000

Balance Sheet of the Narendra Ltd


20092009 20102010

AssetsAssets

LandLand 7500075000 7500075000

Fixed AssetsFixed Assets 140000140000 131000131000

InvestmentInvestment 5900059000 111000111000

Sundry DebtorsSundry Debtors 1200012000 1700017000

BankBank 50005000 30003000

GoodwillGoodwill 3000030000 1900019000

321000321000 356000356000


Cash Flow statementCash Flow statement

Retained earningsRetained earnings 1300013000

DividendDividend 30003000

Profit as per Profit & loss A/cProfit as per Profit & loss A/c 1600016000


Goodwill written offGoodwill written off 1100011000

Interest ExpensesInterest Expenses 1400014000

Income TaxIncome Tax 3700037000

Interest IncomeInterest Income (15000)(15000)

Funds from operationsFunds from operations 7200072000


Add: Increase in creditorsAdd: Increase in creditors 2000020000

Less: Increase in DebtorsLess: Increase in Debtors (5000)(5000)

Cash generated from operationCash generated from operation 8700087000

Income Tax PaidIncome Tax Paid (37000)(37000)

Net Cash flow from operating Net Cash flow from operating activitiesactivities

5000050000


Purchase of InvestmentPurchase of Investment (52000)(52000)

Interest IncomeInterest Income 1500015000

Net cash flows from investing Net cash flows from investing activitiesactivities

(37000)(37000)



Issue of sharesIssue of shares 3000030000

DividendDividend (2000)(2000)

Redemption of DebenturesRedemption of Debentures (29000)(29000)

Interest paidInterest paid (14000)(14000)

Net cash flows from Financing Net cash flows from Financing activitiesactivities

(15000)(15000)

Net decrease in cashNet decrease in cash (2000)(2000)

Cash and Cash Equivalents at Cash and Cash Equivalents at the beginningthe beginning

50005000

Cash and Cash Equivalents at Cash and Cash Equivalents at the endthe end

30003000


Cash & Cash Equivalents

at Beginning

at End

BankBank 50005000 30003000

TotalTotal 50005000 30003000


Exercise 2.Exercise 2.

Prepare cash flow statement from the Prepare cash flow statement from the following details of the Keshav Ltd.following details of the Keshav Ltd.

Profit and Loss A/c for the year ending Profit and Loss A/c for the year ending 31 March 2010 is as follows31 March 2010 is as follows

SalesSales 9000090000

Profit on sale of investment (Sale Profit on sale of investment (Sale Value: Rs. 4000)Value: Rs. 4000)

20002000

Closing StockClosing Stock 60006000


Total Income 98000

PurchasePurchase 4000040000

Manufacturing ExpensesManufacturing Expenses 1700017000

WagesWages 14001400


General ExpGeneral Exp 80008000

Discount on issue of debentureDiscount on issue of debenture 30003000

TaxTax 60006000

General ReserveGeneral Reserve 50005000

Net profitNet profit 1260012600


2009 2010

LiabilitiesLiabilities

Share CapitalShare Capital 5000050000 5000050000

General ReserveGeneral Reserve 1000010000 1500015000

Profit and Loss A/cProfit and Loss A/c 80008000 2060020600

DebenturesDebentures 1000010000 2700027000

CreditorsCreditors 1600016000 1000010000

Provision for TaxProvision for Tax 70007000 1200012000

101000101000 134600134600

Balance Sheet of the Keshav Keshav Ltd


20092009 20102010

AssetsAssets

Fixed AssetsFixed Assets 4000040000 4000040000

MachineryMachinery 2100021000 5560055600

InvestmentInvestment 50005000 30003000

Sundry DebtorsSundry Debtors 1500015000 1430014300

BankBank 50005000 67006700

GoodwillGoodwill 1500015000 1500015000

101000101000 134600134600


Cash Flow statementCash Flow statement

Retained EarningRetained Earning 1260012600

Transfer General ReserveTransfer General Reserve 50005000

Net Profit as per Profit and Loss Net Profit as per Profit and Loss A/cA/c

1760017600


Discount on issue of DebenturesDiscount on issue of Debentures 30003000

Income TaxIncome Tax 60006000

Profit on sale of investmentProfit on sale of investment (2000)(2000)


Funds From operationFunds From operation 2960029600

Decrease in Sundry DebtorsDecrease in Sundry Debtors 700700

Increase in Bills PayableIncrease in Bills Payable 50005000

Increase in Sundry CreditorsIncrease in Sundry Creditors (6000)(6000)

Cash generated from operationCash generated from operation 2930029300

Income Tax PaidIncome Tax Paid (6000)(6000)

Net Cash flow from operating Net Cash flow from operating activitiesactivities

2330023300


Sale of InvestmentSale of Investment 40004000


Purchases of MachineryPurchases of Machinery (39600)(39600)

Net cash flows from investing Net cash flows from investing activitiesactivities

(35600(35600))


Issue of DebenturesIssue of Debentures 1400014000

Net increase in cashNet increase in cash 17001700

Cash & Cash Equivalents at the Cash & Cash Equivalents at the beginningbeginning

50005000

Cash & Cash Equivalents at the Cash & Cash Equivalents at the endend

67006700


Cash & Cash Equivalents

at Beginning

at End

BankBank 50005000 67006700

TotalTotal 50005000 67006700

Balance B/dBalance B/d 2100021000 DepreciationDepreciation 50005000

Cash/Bank A/c Cash/Bank A/c (purchases)(purchases)

3960039600 Balance C/dBalance C/d 5560055600

60600 60600

Machinery A/c

1 management accounting - dr. varadraj bapat, iit mumbai cash flow statement proforma and problems

Documents

varadraj bapat

iit mumbaiadjust

endxxmanagement accounting

iit mumbaiexercise

iit mumbaicash flow

iit mumbaibalance sheet

current liabilitiesxxcash

current liabilitiesxxincrease