Page 182 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 8: Cash Flow Statement

2. Draw the proforma of the Adjusted profit and loss account. Notes
3. Data Ltd., supplies you the following balance on 31st Mar 2008 and 2009.
Liabilities 2008 2009 Assets 2008 2009
Share capital 1,40,000 1,48,000 Bank balance 18,000 15,600
Bonds 24,000 12,000 Accounts Receivable 29,800 35,400
Accounts payable 20,720 23,680 Inventories 98,400 85,400
Provision for debts 1,400 1,600 Land 40,000 60,000
Reserves and Surpluses 20,080 21,120 Good will 20,000 10,000
2,06,200 2,06,400 2,06,200 2,06,400

Additional information:
(a) D ividends am ounting to 7,000 were paid during the year 2009.
(b) Land was purchased for 20,000.

(c) 10,000 were written off on good will during the year.
(d) Bonds of 12,000 were paid during the course of the year.
You are required to prepare a cash flow statement.
4. Since everything has some utility, analyse the cash flow statement analysis and explain its
various utilities.

5. Discuss the procedure of determining cash provided by operating activities. Give suitable
example to illustrate your answer.
6. The following is the abstract of balance sheet of Software securities ltd for the year 2005
and 2006.
2005 2006 2005 2006
Liabilities ( ) ( ) Assets ( ) ( )
Provision for depreciation 108000 396000 Land 26000 81000
Retained earning 244800 370800 Building 60000 360000
9% Debenture 270000 198000 Accumulated
depreciation on building 19800 37800
Account payable 72000 41400 Equipment 122400 347400
Expense payable 0 18000 Accumulated depreciation
on Equipment 18000 50400
Stock in hand 10800 97200
Account receivable 36000 122400
Cash in hand 66600 97200
Preliminary expenses 10800 7200

The income statement of Software Securities Ltd. is as under
Sales 1602000
Less cost of sale 837000
Less operating exp. 397800
Less interest exp. 21600
Loss on sale of equipments 3600
126000

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