Cash flow statement-Important Questions

IMPORTANT QUESTIONS

CHAPTER 14: Cash Flow Statement

  1. Write the importance of cash flow statement?
  2. Define the following with examples?
    1. Operating activities
    2. Investing activities
    3. Financing activities
  3. Identify out of the following transactions that are shown as financing activities:-
    1. Repayment of loan taken
    2. Proceeds from issue of shares
    3. Debentures subscribed by the company
    4. Redemption of preference shares
    5. Interest paid
    6. Dividend paid
    7. Increase in bank overdraft or cash credit
    8. Issue of bonus shares
  4. Identify which of the following transactions are operating, investing or financing activities and cash and cash equivalents:-
    1. Sale of investments
    2. Dividend received on shares
    3. Interest received on investments
    4. Rent received by real estate company
    5. Rent received by a company whose main business is manufacturing
    6. Interest paid on Debentures or long term loans
    7. Marketable securities
    8. Proceeds from shares issued
    9. Interest paid on bank overdraft
  5. Following is the extract of balance sheet:-
    Particulars 31st March 2019 31st March 2018
    Equity share capital
    10% redeemable preference share capital
    Surplus
    Dividend payable    		 5,00,000
    5,00,000
    4,50,000
    20,000    		 5,00,000
    5,00,000
    2,50,000
    ----
    Additional Information:-
    1. Proposed dividend on equity shares for the years ended 31st March, 2018 and 2019 were:- Rs.1,50,000 and Rs.1,00,00
    2. An interim dividend of Rs. 50,000 on equity shares was paid on 31st December 2018
    Determine net profit before tax and extra ordinary items.
  6. Z Ltd. earned a profit of Rs. 5,00,000 after charging depreciation of Rs. 1,00,000 on assets and a transfer to general reserve of Rs. 1,50,000. Goodwill amortized was Rs. 35,000 and gain on sale of machinery was Rs. 15,000.
    Additional Information: At the end of the year, Debtors showed an increase of Rs. 30,000; creditors an increase of Rs. 50,000; prepaid expenses an increase of Rs. 1,000; bills receivable a decrease of Rs. 15,000; bills payable a decrease of Rs. 20,000 and outstanding expenses a decrease of Rs. 10,000. Determine the cash flow from operating activities.
  7. From the following information calculate cash flow from investing activities:
    Particulars Closing Balances Opening Balances
    Machinery (at cost)
    Accumulated Depreciation
    Patents     		4,20,000
    1,10,000
    1,60,000     		4,00,000
    1,00,000
    2,80,000