Taxmann's Corporate Accounting & Financial Management (CAFM | CA & FM) | CRACKER

l.4iQ4SSm (a5O\A<:m5 m /3gP3TTm(a5O83^CUT\m ( m"^: m ,3L<\m m$3YI<^CT?m m m&=em*VB_4Jm*V4; m&=em =KBD m m S;D4m (AUT< m m 1<6\E`<m m f _4iQ4SS 9VQm R3EMm m ]4K=] _4hQ4SS 9VQ +<?: m '>8<m m m2=]_m)bSH47Dm 4@B m&=em =KBD m m S;D4m <c<LUW<:m5km .4Sm)ZDS_]m S;D4 m)d_ m#_; m m!Q m%DK=m-_VS= m&4_FVS4Km D@Be4j m*VB_4Jm*V4;m 0DNK4@=m*VB4; m D]__ m B4HH4[m 4[j4S4 m S;D4m R3Gm m ]4K=] _4SXZDS_] 9VQ C\8L3CP<Ym : 2AC 27C" 6C ,C+ C70C :0# C 22026C02C0+#66#0,6C#,C7"#6C19 (# 7#0, C ,C61#7 C0 C7"#6 C 22026C+ AC 2 1C#, C -AC+#67 & C 2202C02C 6 2 1 , AC,07 C+ AC C 209 "7C70C092C,07# C <"# "C6" )(C C7 & ,C 2 C0 C#,C7" C, @7C #7#0, C 7C#6C,07# C7" 7C, #7" 2C7" C19 )#6" 2C,02C7" C 97"02C02C6 )( 2C?((C C2 610,6# ( C 2C ,AC + C02C(066C0 C 7#0,C70C ,AC0, C0 C ,AC'#, C#,C ,AC+ ,, 2 C7" 2 0+ C 7C#6C69 67 C7" 7C70C :0# C ,AC 09 7C7" C2 2C6"09* C 2066 " &C )(C 7" C 76 C ( =C , C 0,7 ,76C 0 C7" C 19 )# 7#0,C ?7"C 03#!. (C 0: 5+ ,7C 19 )# 7#0,C 02C ,07# 7#0,6 C 0C1 27C0 C7"#6C 00&C+ AC C2 120 9 C02C 01# C#,C ,AC 2+C02C AC ,AC + ,6C 2 1"# C ( 720,# C02C+ " ,# ( C$. (9 #, C1"070 01B, C2 02 #, C7 1#, C02C#, 2+ 7#0,C2 74 : (C 6A67 +6 C 02C 2 120 9 C 0,C ,AC #6 C 7 1 C 1 2 2 7 C + # C 02C 07" 2C #, 2+ 7#0,C 6702 C ;# C 7 C>#7"097C8 C=2#77 ,C1 2+#66#0,C0 C7" C19 )#6" 26 C 2 "C0 C7"#6C 0, #7#0,C#6C(# ( C 2C( (C 7#0, C ((C #6197 6C 2 C69 % 7C70C ("#C%92#6 # 7#0,C0/A C

Chapter-wise Marks Distribution Chapter

2018

2019

2020

2021

2022

J

J

D

J

J

D

J D J

1.

Introduction to Accounting

-

-

2.

Introduction to Corporate Accounting

-

8

5

-

-

-

-

-

-

-

-

5

0.83

13

5

-

5

17

3

-

-

-

5

4.66

3.

Accounting Standards

5

-

-

4.

Accounting for Share Capital

-

-

-

-

-

-

-

-

5

0.83

13 15 13 10

-

5

10 19

-

-

-

25

9.16

5.

Accounting for Debentures

14 10 18

8

-

5

-

13

-

-

-

5

6.08

6.

Related Aspects of Company Accounts

-

15 14

-

-

5

5

-

5

-

-

5

4.08

7.

Consolidation of Accounts

5

7

17

8

-

-

8

13

-

-

-

10

5.66

8.

9.

Financial Statement Analysis

-

-

5

-

-

-

-

-

-

-

-

10

1.25

Cash Flow Statement

-

-

10

-

-

-

-

-

-

-

-

5

1.25

10.

Forecasting Financial Statements

-

-

-

-

-

-

-

-

-

-

-

-

0.00

11.

Introduction to Financial Management

4

-

-

-

-

5

9

-

-

-

-

5

1.91

D

D

2023

Avg.

D

12.

Time Value of Money

-

-

-

1

-

5

1

-

4

-

-

5

1.33

13.

Capital Budgeting

8

25 17

-

-

12

4

21

-

-

-

5

7.66

14.

Cost of Capital

8

11 19

-

-

9

7

7

-

-

-

5

5.5

15.

Capital Structure & Leverages

8

12 12

-

-

20

4

12

-

-

-

5

6.08

16.

Dividend Decisions

8

-

8

-

-

8

9

4

-

-

-

5

3.5

17.

Working Capital Management 21 24 13

-

-

12 36 41

-

-

-

20

13.91

18.

Security Analysis

17

4

25

-

-

8

20

4

-

-

-

5

6.91

19.

Operational Approach to Financial Decision

-

-

5

-

-

-

-

-

-

-

-

5

0.83

Note: J : June; D : December

I-5

TAXMANN®

S. No.

Previous Exam Trend Analysis Que. No.

Marks

Category

Accounting for Share Capital

8

Practical

1(b)

Accounting for Share Capital

3

Practical

1(c)

Accounting for Share Capital

4

Descriptive

2(a)

Financial Statement Analysis

5

Practical

1(a)

Chapter Name

Accounting for Debentures

5

Practical

2(c)

Financial Statement Analysis

5

Practical

3(a)

Related Aspects of Company Accounts

5

Practical

3(b)

Accounting for Share Capital

5

Practical

3(c)

Accounting for Share Capital

5

Practical

4(a)

Consolidation of Accounts

5

Practical

4(b)

Consolidation of Accounts

5

Practical

4(c)

Cash Flow Statement

5

Practical

4A(i)

Introduction to Accounting

5

Descriptive

4A(ii)

Introduction to Corporate Accounting

5

Descriptive

4A(iii)

Accounting Standards

5

Descriptive

5(a)

Working Capital Management

10

Practical

5(b)

Working Capital Management

5

Practical

5(c)

Working Capital Management

5

Practical

6(a)

Operational Approach to Financial Decision

5

Practical

6(b)

Capital Budgeting

5

Practical

6(c)

Cost of Capital

5

Practical

6(d)

Dividend Decisions

5

Practical

6A(i)

Security Analysis

5

Descriptive

6A(ii)

Capital Structure & Leverages

5

Practical

6A(iii)

Time Value of Money

5

Descriptive

6A(iv)

Introduction to Financial Management

5

Descriptive

I-7

TAXMANN®

2(b)

Chapter-wise Comparison with Study Material Chapter No.

Name of Chapter

Study Material Chapter

Part I: Corporate Accounting Introduction to Accounting

Chapter 1

2.

Introduction to Corporate Accounting

Chapter 2

3.

Accounting Standards

Chapter 3

4.

Accounting for Share Capital

Chapter 4

5.

Accounting for Debentures

Chapter 5

6.

Related Aspects of Company Accounts

Chapter 6

7.

Consolidation of Accounts

Chapter 7

8.

Financial Statement Analysis

Chapter 8

9.

Cash Flow Statement

Chapter 9

10.

Forecasting Financial Statements

Chapter 10

Part II: Financial Management 11.

Introduction to Financial Management

Chapter 11

12.

Time Value of Money

Chapter 12

13.

Capital Budgeting

Chapter 13

14.

Cost of Capital

Chapter 14

15.

Capital Structure & Leverages

Chapter 15

16.

Dividend Decisions

Chapter 16

17.

Working Capital Management

Chapter 17

18.

Security Analysis

Chapter 18

19.

Operational Approach to Financial Decision

Chapter 19

I-9

TAXMANN®

1.

Contents PAGE

Chapter-wise Marks Distribution

I-5

Previous Exam Trend Analysis

I-7

Chapter-wise Comparison with Study Material

I-9

PART I Chapter 1 INTRODUCTION TO ACCOUNTING

1.3

Chapter 2 INTRODUCTION TO CORPORATE ACCOUNTING

2.1

Chapter 3 ACCOUNTING STANDARDS

3.1

Chapter 4 ACCOUNTING FOR SHARE CAPITAL

4.1

Chapter 5 ACCOUNTING FOR DEBENTURES

5.1

Chapter 6 RELATED ASPECTS OF COMPANY ACCOUNTS

6.1

Chapter 7 CONSOLIDATION OF ACCOUNTS

7.1

Chapter 8 FINANCIAL STATEMENT ANALYSIS

8.1

I-11

TAXMANN®

CORPORATE ACCOUNTING

I-12

CONTENTS PAGE

Chapter 9 CASH FLOW STATEMENT

9.1

Chapter 10 FORECASTING FINANCIAL STATEMENTS

10.1

PART II FINANCIAL MANAGEMENT Chapter 11 INTRODUCTION TO FINANCIAL MANAGEMENT

11.3

Chapter 12 TIME VALUE OF MONEY

12.1

Chapter 13 CAPITAL BUDGETING

13.1

TAXMANN®

Chapter 14 COST OF CAPITAL

14.1

Chapter 15 CAPITAL STRUCTURE & LEVERAGES

15.1

Chapter 16 DIVIDEND DECISIONS

16.1

Chapter 17 WORKING CAPITAL MANAGEMENT

17.1

Chapter 18 SECURITY ANALYSIS

18.1

Chapter 19 OPERATIONAL APPROACH TO FINANCIAL DECISION

Solved Paper : Dec. 2023 (Suggested Answers)

19.1 P.1

9

20B7 5;>F BC0C4<4=C

CHAPTER

THEORETICAL QUESTIONS Q. 1. Distinguish between: Cash Flow Statement & Fund Flow Statement [June 2002 (10 Marks)] Ans. Following are the main points of difference between cash flow statement & fund flow statement: Points Meaning

Adjustments for prepaid & outstanding Opening or closing balance

Use

Cash flow statement is covers opening Funds flow statement does not cover and closing balance of cash and cash opening and closing balance of cash equivalents. and cash equivalents. Such items are covered in statement called ‘changes in working capital’.

Cash flow statement is generally Funds flow statement is useful in used as a tool of short-term financial planning sources and application of analysis and cash planning purpose. various funds.

Q. 2. Distinguish between: ‘Cash’ and ‘Cash Equivalents’

[Dec. 2008 (3 Marks)]

Or Write short notes on: Cash, Cash Equivalents and Cash Flows [June 2010 (3 Marks)] Ans. Cash: Cash comprises cash on hand and demand deposits with banks.

9.1

TAXMANN®

Concerned with

Cash Flow Statement Funds Flow Statement A cash flow statement is a statement Fund flow statement is statement of showing change in cash position from sources & application of funds and one period to another. statement of changes in working capital.

Cash flow statement is concerned with Funds flow statement is based on a cash only, which is only a part of the wider concept of fund i.e. working working capital. capital.

In the case of cash flow statements No such adjustments are needed in the adjustments requires for prepaid and case of funds flow statement. outstanding items.

9.2

PART I : CORPORATE ACCOUNTING

TAXMANN®

Cash Equivalents: Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash Flows: Cash flows are inflows and outflows of cash and cash equivalents.

Cash & Cash Equivalents: Cash equivalents are held for the purpose of meeting shortterm cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value.

Therefore, an investment normally qualifies as a cash equivalent only when it has a short maturity of, say, 3 months or less from the date of acquisition.

Investments in shares are excluded from cash equivalents unless they are, in substance, cash equivalents; for example, preference shares of a company acquired shortly before their specified redemption date (provided there is only an insignificant risk of failure of the company to repay the amount at maturity).

Cash flows exclude movements between items that constitute cash or cash equivalents because these components are part of the cash management of an enterprise rather than part of its operating, investing and financing activities. Cash management includes the investment of excess cash in cash equivalents.

Q. 3. What are the benefits of cash flow statement? Mention the parties who are benefited from preparing cash flow statement.

[Dec. 2009 (6 Marks)] Ans. A cash flow statement is a statement showing change in cash position from one period to another. It presents a summary of cash flows from operating, investing and financing activities.

Example: Cash balance as on 31.12.2023 – ` 20,000 Cash balance as on 31.12.2024 – ` 30,000 Thus, there has been an inflow of cash of ` 10,000 in the year 2024.

A projected cash flow statement: It presents a summary of projections of all the future cash flows from operating, investing and financing activities.

Benefits of cash flow statement: A cash flow statement is very useful in short range planning. It enables the management to plan the acquisition and utilization cash for a sound financial position. The importance and uses of cash flow analysis can be summarized in the following respects: It explains the reasons for inflows and outflows of cash.

It is important tool for planning cash requirements and for controlling the cash position.

It facilitates the management to plan and co-ordinate the financial operations properly.

It helps for making plans for the future.

It helps in ascertaining how much cash will be available to meet obligations to trade creditors, to pay bank loans and to pay dividend to the shareholders.

It enables the management to invest it to some profitable investments.

It helps to improve liquidity.

9.3

CH. 9 : CASH FLOW STATEMENT

Long-term lenders of funds can use the statement as a means of estimating the firm’s ability to serve its debts.

Q. 4. Classify the following activities as (i) Operating activities (ii) Investing activities (iii) Financing activities (iv) Cash & cash equivalents: (1) Royalty received (2) Brokerage paid on purchase of shares (3) Buy-back of own shares for cash (4) Marketable securities having maturity period of 3 months (5) Short-term deposits having maturity period of 4 months.

[June 2019 (5 Marks)] Ans. (1) Royalty received: Operating Activities (2) Brokerage paid on purchase of shares: Investing Activities (3) Buy-back of own shares for cash: Financing Activities (4) Marketable Securities having maturity period of 3 months: Cash and Cash Equivalent (5) Short-term deposits having maturity period of 4 months: Investing Activities

Problem No. 1] The Amex Ltd. gives the following condensed balance sheets relating to years 2021 and 2022 and the profit and loss appropriation account for the year 2022: Balance sheets of Amex Ltd. as on 31st March 2021 and 2022 EQUITY & LIABILITIES Share capital Reserves Profit and loss account Debentures Creditors for goods Provision for income-tax ASSETS Gross block Less: Depreciation Net block Stock in trade Book debts Cash in hand and at bank Misc. expenditures: - Discount on issue of shares - Preliminary expenses

2021 (` ) 5,00,000 1,50,000 40,000 3,00,000 1,70,000 60,000

2022 (` ) 6,00,000 1,80,000 65,000 2,50,000 1,60,000 80,000

12,20,000 (` ) 10,00,000 (3,70,000) 6,30,000 2,40,000

13,35,000 (` ) 11,20,000 (4,60,000) 6,60,000 3,70,000

2,50,000 80,000

2,30,000 60,000

10,000 10,000

7,500 7,500

12,20,000

13,35,000

TAXMANN®

PROBLEMS & SOLUTIONS

9.4

PART I : CORPORATE ACCOUNTING

P & L Appropriation A/c for the year ended 31.3.2022 To Transfer to reserves

` 30,000 By Balance b/d

` 40,000

To Interim dividend paid

80,000 By Net Profit for current year

To Bal. carried to balance sheet

65,000

1,35,000

1,75,000 1,75,000 You are required to prepare cash flow statement showing the following: (i) Cash from operating activities

(ii) Cash from financing activities (iii) Cash from investing activities (iv) Net increase/decrease in cash

[Dec. 2007 (3 + 2 + 1 + 1 = 7 Marks)]

Ans.

TAXMANN®

Cash Flow Statement (Indirect Method) For the year ended 31.12.2009 Particulars Cash flows from operating activities Net profit before working capital changes

`

`

3,10,000

(+) Decrease in Current Assets -

Book debts (debtors)

20,000

(-) Increase in Current Assets -

Stock in trade

(+) Increase in Current Liabilities

(1,30,000) -

(-) Decrease in Current Liabilities -

Creditors for goods

Cash generated from operation Income-tax paid Cash before extra ordinary item Extra ordinary item Cash flow from investing activities: Fixed assets purchased Cash flows from financing activities: Issue of shares

(10,000) 1,90,000 (60,000) 1,30,000 -

1,30,000

(1,20,000)

(1,20,000)

1,00,000

Redemption of debenture

(50,000)

Dividend paid Total (A) + (B) + (C)

(80,000)

(30,000) (20,000)

Cash & cash equivalent at the beginning

80,000

Cash & cash equivalent at the end

60,000

CH. 9 : CASH FLOW STATEMENT

Dr.

Share Capital A/c

By Balance b/d

9.5 Cr. 5,00,000

To Balance c/d

6,00,000 By Bank A/c [Bal. Fig.] 6,00,000

1,00,000 6,00,000

Dr.

Reserve A/c

By Balance b/d

Cr. 1,50,000

To Balance c/d

1,80,000 By P & L Adj. A/c [Bal. Fig.] 1,80,000

30,000 1,80,000

Dr. To Bank A/c [Bal. Fig.] To Balance c/d

Dr. To Bank A/c To Balance c/d

To Bank A/c [Bal. Fig.]

Dr.

2,50,000 3,00,000

3,00,000

Provision For Tax A/c 60,000 By Balance b/d 80,000 By P & L Adj. A/c [Bal. Fig.] 1,40,000 Fixed Assets A/c 10,00,000

80,000 1,40,000 Cr. 11,20,000 11,20,000

Depreciation A/c

By Balance b/d

Cr. 3,70,000

4,60,000 By P & L Adj. A/c 4,60,000

Dr. To Balance b/d

Discount on Issue of Shares A/c 10,000 By P & L Adj. A/c [Bal. Fig.]

By Balance c/d 10,000 Preliminary Expenses A/c 10,000 By P & L Adj. A/c [Bal. Fig.]

By Balance c/d 10,000

Dr. To Bank A/c [Bal. Fig.]

Cr. 60,000

1,20,000 By Balance c/d 11,20,000

To Balance c/d

Dr. To Balance b/d

Cr. 3,00,000

Interim Dividend A/c 80,000 By P & L Adj. A/c 80,000

90,000 4,60,000 Cr. 2,500 7,500 10,000 Cr. 2,500 7,500 10,000 Cr. 80,000 80,000

TAXMANN®

Dr. To Balance b/d

Debentures A/c 50,000 By Balance b/d

9.6 Dr. To Reserve

PART I : CORPORATE ACCOUNTING

Profit & Loss Adjustment A/c 30,000 By Balance b/d

Cr. 40,000

To Provision for tax

80,000 By Profit before working

To Depreciation

90,000

To Discount on shares

2,500

To Preliminary expenses

2,500

To Interim dividend

80,000

To Balance c/d

3,10,000

capital changes [Bal. Fig.]

65,000 3,50,000

3,50,000

Problem No. 2] Following are the summarized balance sheets of Gamma Ltd. as at 31st March, 2023 and 31st March, 2024: EQUITY & LIABILITIES Shareholder’s Funds Share capital

4,50,000

4,50,000

General reserve

3,00,000

3,10,000

56,000

68,000

-

2,70,000

Creditors

1,68,000

1,34,000

Provision for taxation

75,000 10,49,000 (` )

10,000 12,42,000 (` )

4,00,000

3,20,000

50,000

60,000

Inventory

2,40,000

2,10,000

Debtors

2,10,000

4,55,000

Cash at bank

1,49,000 10,49,000

1,97,000 12,42,000

Profit and loss account TAXMANN®

Non-Current Liabilities Mortgage loan Current Liabilities

ASSETS Non-Current Assets Plant and machinery Investments Current Assets

Additional information: (i) Investments costing ` 8,000 were sold during the year for ` 8,500. (ii) Provision for taxation made during the year was ` 9,000. (iii) During the year, a part of plant and machinery costing ` 10,000 was sold for ` 12,000, the profit was included in profit and loss account. (iv) Dividend paid during the year amounted to ` 44,080.

You are required to prepare cash flow statement in new format as per Accounting Standard (Revised) by indirect method.

[June 2008 (10 Marks)]

9.7

CH. 9 : CASH FLOW STATEMENT

Ans. Cash Flow Statement (Indirect Method) For the year ended 31.3.2024 Particulars Cash flows from operating activities Net profit before working capital changes

`

`

1,42,580

(+) Decrease in Current Assets -

30,000

Inventory

(-) Increase in Current Assets -

(2,45,000)

Debtors

-

(+) Increase in Current Liabilities (-) Decrease in Current Liabilities -

Creditors

Cash generated from operation Income-tax paid Cash before extra ordinary item

(34,000) (1,06,420) (74,000) (1,80,420) 12,000

Sale of investment

8,500

Purchase of investment Cash flows from financing activities Mortgage loan taken Dividend paid Total (a) + (b) + (c)

(18,000)

(1,80,420)

2,500

2,70,000 (44,080)

2,25,920 48,000

Cash & cash equivalent at the beginning

1,49,000

Cash & cash equivalent at the end

1,97,000

Dr.

Cr. 4,50,000

To Balance c/d

Dr. To Balance c/d

Dr. To Bank A/c [Bal. Fig.] To Balance c/d

Share Capital A/c

By Balance b/d 4,50,000 4,50,000

4,50,000

General Reserve A/c

By Balance b/d 3,10,000 By P & L Adj. A/c [Bal. Fig.] 3,10,000

Cr. 3,00,000 10,000 3,10,000

Provision For Tax A/c 74,000 By Balance b/d 10,000 By P & L Adj. A/c [Bal. Fig.] 84,000

Cr. 75,000 9,000 84,000

TAXMANN®

Extra ordinary item Cash flow from investing activities Sale of plant & machinery

9.8

PART I : CORPORATE ACCOUNTING

Dr.

Mortgage Loan A/c

By Balance b/d

To Balance c/d

Dr. To Balance b/d To P & L Adj. A/c

Cr. -

2,70,000 By Bank A/c [Bal. Fig.] 2,70,000

2,70,000 2,70,000

Plant & Machinery A/c 4,00,000 By Bank A/c

Cr. 12,000 70,000

2,000 By Depreciation A/c [Bal. Fig.]

(Profit on sale)

By Balance c/d

3,20,000 4,02,000

4,02,000 Dr. To Balance b/d To P & L Adj. A/c

Investment A/c 50,000 By Bank A/c

Cr. 8,500

500 By Balance c/d

60,000

(Profit on sale)

TAXMANN®

To Bank A/c [Bal. Fig.]

Dr. To Bank A/c

18,000 68,500

68,500

Dividend A/c 44,080 By P & L Adj. A/c [Bal. Fig.] 44,080

Dr. To General Reserve

Cr. 44,080 44,080

Profit & Loss Adjustment A/c 10,000 By Balance b/d

Cr. 56,000 2,000

To Provision for tax

9,000 By Profit on sale of plant

To Depreciation

70,000 By Profit on investment

500

To Dividend

44,080 By Profit before working

1,42,580

To Balance c/d

68,000 2,01,080

capital changes [Bal. Fig.] 2,01,080

Problem No. 3] A company has provided you the following details: Liabilities

31.3.2022 (` )

31.3.2023 (` )

Share capital

70,000

74,000

Debentures

12,000

6,000

700

800

10,360

11,840

10,040 1,03,100

10,560 1,03,200

Reserve for bad debts Trade creditors Profit and loss account

9.9

CH. 9 : CASH FLOW STATEMENT

Assets Cash

9,000

7,800

Debtors

14,900

17,700

Stock

49,200

42,700

Land

20,000

30,000

10,000 1,03,100

5,000

Goodwill

1,03,200

Additional information: - Dividend paid ` 3,500 and - Land was purchased for ` 10,000.

Prepare a cash flow statement as per Accounting Standard–3 (Revised).

[June 2009 (9 Marks)] Ans. Cash Flow Statement (Indirect Method) For the year ended 31.3.2023

Cash flow from investing activities: Purchase of land Cash flows from financing activities: Share capital issued Redemption of debentures Dividend paid Total (A) + (B) + (C) Cash & cash equivalent at the beginning Cash & cash equivalent at the end Dr. To Balance c/d

Share Capital A/c

By Balance b/d 74,000 By Bank A/c [Bal. Fig.] 74,000

`

` TAXMANN®

Particulars Cash flows from operating activities Net profit before working capital changes (+) Decrease in Current Assets - Stock (-) Increase in Current Assets Debtors (+) Increase in Current Liabilities - Creditors (-) Decrease in Current Liabilities Cash generated from operation Income tax paid Cash before extra ordinary item Extra ordinary item

9,120 6,500 (2,800) 1,480 14,300 14,300 -

14,300

(10,000)

(10,000)

4,000 (6,000) (3,500)

(5,500) (1,200) 9,000 7,800 Cr. 70,000 4,000 74,000

9.10

PART I : CORPORATE ACCOUNTING

Dr. To Bank A/c [Bal. Fig.]

Debenture A/c 6,000 By Balance b/d

To Balance c/d

Dr.

Cr. 12,000

6,000 12,000

12,000

Reserve For Bad Debts A/c

By Balance b/d

To Balance c/d

Cr. 700

800 By P & L Adj. A/c [Bal. Fig.] 800

100 800

Dr. To Balance b/d

Land A/c 20,000

To Bank A/c [Bal. Fig.]

10,000 By Balance c/d 30,000

30,000 30,000

Goodwill A/c 10,000 By P & L Adj. A/c

Cr. 5,000

Dr. To Balance b/d

Cr.

By Balance c/d

5,000 10,000

Dividend A/c 3,500 By P & L Adj. A/c [Bal. Fig.] 3,500

Cr. 3,500 3,500

TAXMANN®

10,000 Dr. To Bank A/c

Dr. To Reserve for bad debts

Profit & Loss Adjustment A/c 100 By Balance b/d

Cr. 10,040

To Goodwill

5,000 By Profit before working

To Dividend

3,500

To Balance c/d

10,560 19,160

9,120

capital changes [Bal. Fig.] 19,160

Problem No. 4] From the following balance sheets and information, prepare a cash flow statement of Rajat Ltd. for the year ended 31st March, 2022 as per Accounting Standard–3: LIABILITIES

31.3.2022

31.3.2021

Shareholder’s Funds Equity share capital

(` ) 6,00,000

(` ) 5,00,000

-

2,00,000

Capital redemption reserve

1,00,000

-

Capital reserve

1,00,000

-

General reserve

1,00,000

2,50,000

70,000

50,000

2,00,000

-

10% Preference share capital

Profit and loss account Non-Current Liabilities 9% Debentures

9.11

CH. 9 : CASH FLOW STATEMENT

Current Liabilities 95,000

80,000

Bills payable

20,000

30,000

Liabilities for expenses

30,000

20,000

Provision for taxation

95,000

60,000

90,000 15,00,000

60,000 12,50,000

ASSETS Land and building

1,50,000

2,00,000

Plant and machinery

7,65,000

5,00,000

Investments

50,000

80,000

Inventory

95,000

90,000

Bills receivable

65,000

70,000

Sundry debtors

1,75,000

1,30,000

Cash and bank

65,000

90,000

Preliminary expenses

10,000

25,000

1,25,000 15,00,000

65,000 12,50,000

Proposed dividend

Voluntary separation payments

Additional information: (i) A piece of land being sold out for ` 1,50,000 (cost ` 1,20,000) and the balance land was revalued. Capital reserve consisted of profit on sale and profit on revaluation of land and building. (ii) On 1st April, 2021, a plant was sold for ` 90,000 (original cost ` 70,000 and written down value ` 50,000) and debentures worth ` 1 lakh were issued at par as part consideration for plant of ` 4.5 lakh acquired. (iii) Part of the investments (cost ` 50,000) was sold for ` 70,000. (iv) Pre-acquisition dividend received ` 5,000 was adjusted against cost of investment. (v) Directors have proposed 15% dividend for the current year. (vi) Voluntary separation cost of ` 50,000 was adjusted against general reserve. (vii) Income-tax liability for the current year was estimated at ` 1,35,000. (viii) Depreciation @ 15% has been written off from plant account, but no depreciation has been charged on land and building.

[Dec. 2010 (15 Marks)]

TAXMANN®

Sundry creditors

Corporate Accounting & Financial Management

(CAFM | CA & FM) | CRACKER AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

N.S. ZAD TAXMANN JANUARY 2024 2ND EDITION 9789357789851 532 PAPERBACK

Rs. 515

Description This book is prepared exclusively for the Executive Level of Company Secretary Examination requirement. It covers the questions (topic-wise) & detailed answers strictly as per the new syllabus of ICSI. The Present Publication is the 2nd Edition for the CS-Executive | New Syllabus | June/Dec. 2024 Exams. This book is authored by CS N.S. Zad, with the following noteworthy features: 

Strictly as per the New Syllabus of ICAI



Coverage of this book includes 

Fully-Solved Questions of Past Exams, including the Dec. 2023 Exam



[Arrangement of Questions] Topic-wise arrangement of past exam questions



[Chapter-wise Marks Distribution] from June 2018 onwards



[Previous Exam Trend Analysis] is provided from Dec. 2023 onwards



[Comparison with ICSI Study Material] is provided chapter-wise



[Amended & Updated] as per the provisions of the Companies Act 2013

ORDER NOW