Page 220 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING
P. 220

Unit 12: Fund Flow Analysis




                                                                                                Notes
                 Example: From the following relating to Panasonic Ltd., prepare funds fl ow statement.

                                   Balance Sheet of Panasonic Ltd.
                                        as on 31st December

           Liabilities            2004 (`)  2005 (`)  Assets           2004 (`)  2005 (`)
           Share capital          6,00,000  8,00,000  Fixed assets     3,80,000  4,20,000
           Reserves               2,00,000  1,00,000  Accounts receivable  2,10,000  3,00,000
           Retained earnings       60,000  1,20,000  Stock             3,00,000  3,90,000
           Accounts payable        90,000  2,70,000  Cash               60,000  1,80,000
                                  9,50,000  12,90,000                  9,50,000  12,90,000
          Additional Information:
          1.   The company issued bonus shares for ` 1,00,000 and for cash ` 1,00,000.
          2.   Depreciation written off during the year ` 30,000.

          Solution:

          The first step is prepare the statement of changes in working capital
                               Schedule of Changes in Working Capital

                                        2004       2005      Increase in   Decrease in
                                                           Working Capital  Working Capital
           Current Asset:
           Cash                          60,000   1,80,000    1,20,000           —
           Stock in trade              3,00,000   3,90,000      90,000           —
           Accounts receivable         2,10,000   3,00,000     90,000            —
                                       5,70,000   8,70,000
           Current Liabilities:
           Accounts payable              90,000   2,70,000                   1,80,000
           Working capital             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








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