Page 94 - DCOM302_MANAGEMENT_ACCOUNTING

Unit 5: Fund Flow Statement

The next step is to prepare the Adjusted Profit & Loss Account. Notes
Adjusted Profit & Loss Account

Particulars ` Particulars `
To Machinery (Loss on sale) 2,000 By Balance B/d -----------
To Provision for Depreciation 18,000 By fund from operations 65,000
To Balance c/d (Net profi t) 45,000
65,000 65,000
The next step is to prepare the fund fl ow statement.
Fund Flow Statement

Sources ` Applications `
Sale of machinery 5,000 Purchase of land 10,000
Loan from P.N.Bank 10,000 Purchase of Building 25,000
Fund from operation 65,000 Drawings 17,000
Repayment of Mr. White Loan 25,000
Increase in working capital 3,000
80,000 80,000
2. From the following balance sheets of A Ltd. on 31st Dec, 2008 and 2009, you are required
to prepare fund fl ow statement.
The following additional information has also been given:

Depreciation charged on plant was `4,000 and on building `4,000.
Provision for taxation of `19,000 was made during the year 2009.
Interim Dividend of `8,000 was paid during the year 2009.

Balance Sheet
Liabilities 2008 ` 2009 ` Assets 2008 ` 2009 `
Share capital 1,00,000 1,00,000 Goodwill 12,000 12,000
General Reserve 14,000 18,000 Building 40,000 36,000
Profit & Loss A/c 16,000 13,000 Plant 37,000 36,000

Sundry creditors 8,000 5,400 Investments 10,000 11,000
Bills payable 1,200 800 Stock 30,000 23,400
Provision for taxation 16,000 18,000 Bill receivable 2,000 3,200
Provision for doubtful debts 400 600 Debtors 18,000 19,000
Cash 6,600 15,200
1,55,600 1,55,800 1,55,600 1,55,800
The following items are considered for the statement of changes in the working capital:
Current Assets:

Stock
Bills receivable
Debtors
Cash

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