Page 90 - DCOM302_MANAGEMENT_ACCOUNTING

Unit 5: Fund Flow Statement

Total Current Liabilities (B): (TCL) Notes
Accounts payable 90,000 2,70,000 1,80,000
Working capital (A-B) 4,80,000 6,00,000 3,00,000 1,80,000
Increase in working capital 1,20,000 1,20,000
6,00,000 6,00,000 3,00,000 3,00,000
The next step is to prepare the non-current account.
First non-current asset account should have to be prepared.

Dr Fixed Assets A/c Cr
Particulars ` Particulars `
To Balance b/d 3,80,000 By Depreciation (Adjusted Profi t 30,000
&Loss A/c)

To Cash (Purchase) Balancing fig. 70,000 By Balance c/d 4,20,000
4,50,000 4,50,000
The next non-current account is that non-current liability which is nothing but Share capital
Dr Share Capital A/c Cr
Particulars ` Particulars `
To Balance c/d 8,00,000 By Cash (Issue of shares) 1,00,000
By General reserve 1,00,000
By Balance b/d 6,00,000
8,00,000 8,00,000
And another non-current account is to be prepared that general reserve account.

Dr General Reserve A/c Cr
Particulars ` Particulars `
To Share capital 1,00,000 By Balance b/d 2,00,000
To Balance c/d 1,00,000
2,00,000 2,00,000

The next step is to prepare the Adjusted Profit & Loss A/c.

Dr Adjusted Profit & Loss A/c Cr
Particulars ` Particulars `
To (Fixed Assets ) 30,000 By Balance b/d (Retained Earnings) 60,000
depreciation
To Balance c/d 1,20,000 By Fund from operation Balancing fi g. 90,000
1,50,000 1,50,000
The next step is to prepare the fund flow statement of the enterprise.

Fund Flow Statement

Sources ` Applications `
Issue of Shares 1,00,000 Purchase of Land 70,000
Funds from operation 90,000 Increase in working capital 1,20,000
1,90,000 1,90,000

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