2. Q.1: Direct Method Ashok Ltd (CFS for FY ended on 31.03.2008) Cash from Operating Activities Cash Received from Customers 25,02,000 LESS: Cash Paid to Suppliers & Employees (21,15,200) CASH Generated from Operations = 3,86,800 LESS: Income Tax paid (86,800) A = NET CASH from Operating Activities = 3,00,000 Cash From Investing Activities Purchase of Land (48,000) Purchase of Building & Equipment (2,88,000) Sale of Equipment 36,000 B = NET CASH used in Investing Activities = (3,00,000) Cash From Financing Activities Issue of Share Capital 84,000 Dividend Paid (72,000) C = NET CASH from Financing Activities = 12,000 TOTAL CASH FLOW (A+B+C) = 12,000 ADD: OP. Cash & Cash Equivalent 60,000 BALANCE = Closing Cash & Cash Equivalents = 72,000 Prof. S. S. Pethe 6/15/2011 2 Prof. S S PETHE 9860544418
3. WN#1 = Cash Reced from Customers Sales 25,20,000 Add: Op. Debtors 1,68,000 Less: Cl. Debtors (1,86,000) Total = 25,02,000 ACCUMULATED DEPRECIATION A/C Dep on MS 48,000 OP 1,20,000 CL 1,32,000 Dep D.Y.(P&L) 60,000 WN#4 = Profit on Sale of Machinery Original Cost 72,000 Less: Accumulated Dep (48,000) WDV = 24,000 ADD: Profit on MS 12,000 Sale Price = 36,000 WN#2= Cash Paid to Suppliers & Employees Cost of Goods Sold 19,80,000 Add: Operating Exp 80,000 Salaries & Wages 2,40,000 Op = Creditors (CL) 2,40,000 Op = OS Exp (CL) 96,000 CL = Stock (CA) 9,000 CL = Advances (CA) 24,000 Less: CL = Creditors (2,34,000) CL = OS Exp (2,64,000) OP = Stock (7,800) OP = Advances (48,000) Total = 21,15,200 Prof. S. S. Pethe MACHINERY A/C OP 3,60,000 Dep on MS 48,000 Profit on MS 12,000 Sale Price of MS 36,000 Purchase D.Y. 2,88,000 CL 5,76,000 PROVISION FOR TAX A/C Tax Paid 86,800 CL 13,200, OP 12,000 P&L A/c 88,000 6/15/2011 3 Prof. S S PETHE 9860544418
