Page 156 - DMGT403_ACCOUNTING_FOR_MANAGERS

Increase in Working
1995
1994
Capital Decrease in 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 —
Unit 7: Fund Flow Statement
5,70,000 8,70,000
Current Liabilities:
Accounts payable 90,000 2,70,000 1,80,000
Notes
Working capital 4,80,000 6,00,000 3,00,000 1,80,000
Increase in working 1,20,000 1,20,000
capital
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 Profit 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 ) depreciation 30,000 By Balance b/d (Retained Earnings) 60,000
To Balance c/d 1,20,000 By Fund from operation Balancing fig.. 90,000
1,50,000 1,50,000

The next step is to prepare the fund flow statement of the enterprise.

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