Page 106 - DCOM302_MANAGEMENT_ACCOUNTING

Unit 5: Fund Flow Statement

Additional Information: Notes

(a) Operating expenses include depreciation of ` 59400 and charges from preliminary
expenses of ` 3600.
(b) Land was sold at its book value.
(c) Cash dividend paid for the year 2006 amounted to ` 27000 and fully paid bonus
shares were given in the ratio of 2 shares for every 3 shares hel(d).
(d) Interest expenses was paid in cash.
(e) Equipment with a cost of ` 298800 was purchased for cash. Equipment with a cost of
` 73800 (book value ` 64800) was sold for ` 61200.
(f) Debenture for ` 18000 were redeemed for cash and for ` 54000 were redeemed by
converting into equity shares at par value.

(g) Equity shares of ` 162000 were issued for cash at par.
(h) Income tax paid during the year amounted to ` 117000.
Prepare the fund flow statement with both the methods.

10. “Fund flow statements can be used to identify a variety of problems in the way a company
operates.” Illustrate the statement by the help of suitable examples.

Answers: Self Assessment

1. cash 2. Working capital change
3. False 4. True
5. False 6. False
7. (c) 8. (a)

9. (a) 10. (a)
11. (b) 12. (a)
13. (a) 14. (d)
15. (d) 16. (a)

5.8 Further Readings

Books B.M. Lall Nigam and I.C. Jain, Cost Accounting, Prentice-Hall of India (P) Ltd.
Hilton, Maher and Selto, Cost Management, 2nd Edition, Tata McGraw-Hill
Publishing Company Ltd.
M.N. Arora, Cost and Management Accounting, 8th Edition, Vikas Publishing House
(P) Ltd.
M.P. Pandikumar, Management Accounting, Excel Books.

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