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    Balance Sheet As On January 31, 2008 & 2007 Liabilities 2008 2007

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    Sai Deshpande
    Welspun Company reported a net loss of Rs. 18,000 for the year ended January 31, 2008 according to their income statement. Their balance sheet shows declining current assets and increasing long-term liabilities from 2007 to 2008. Specifically, cash and cash equivalents fell from Rs. 69,000 to Rs. 12,000. This document provides financial statements for Welspun Company and additional details to prepare an indirect cash flow statement analyzing the source of their cashflow problems over this period.

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    Balance Sheet As On January 31, 2008 & 2007 Liabilities 2008 2007

    Uploaded by

    Sai Deshpande
    35 views2 pages
    Welspun Company reported a net loss of Rs. 18,000 for the year ended January 31, 2008 according to their income statement. Their balance sheet shows declining current assets and increasing long-term liabilities from 2007 to 2008. Specifically, cash and cash equivalents fell from Rs. 69,000 to Rs. 12,000. This document provides financial statements for Welspun Company and additional details to prepare an indirect cash flow statement analyzing the source of their cashflow problems over this period.

    Original Title

    Cashflow problem PG Sum 1

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    Welspun Company reported a net loss of Rs. 18,000 for the year ended January 31, 2008 according to their income statement. Their balance sheet shows declining current assets and increasing long-term liabilities from 2007 to 2008. Specifically, cash and cash equivalents fell from Rs. 69,000 to Rs. 12,000. This document provides financial statements for Welspun Company and additional details to prepare an indirect cash flow statement analyzing the source of their cashflow problems over this period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    35 views2 pages

    Balance Sheet As On January 31, 2008 & 2007 Liabilities 2008 2007

    Uploaded by

    Sai Deshpande
    Welspun Company reported a net loss of Rs. 18,000 for the year ended January 31, 2008 according to their income statement. Their balance sheet shows declining current assets and increasing long-term liabilities from 2007 to 2008. Specifically, cash and cash equivalents fell from Rs. 69,000 to Rs. 12,000. This document provides financial statements for Welspun Company and additional details to prepare an indirect cash flow statement analyzing the source of their cashflow problems over this period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Cashflow problem:

    Welspun Company’s Profit & Loss Account for the year ended January 31, 2008 and Balance
    Sheet on January 31, 2008 and 2007 are as follows.

    Amount Rs.
    Sales 5,70,000
    Add : Interest Income 2,000
    Add: Gain on Sale of Investments 7,000
    TOTAL INCOME 5,79,000
    Less: Cost of Goods sold 4,45,000
    Depreciation 89,000
    Selling & Administration Expenses 46,000
    Interest Expenses 14,000
    Loss on Sale on Plant & Machinery 3,000
    Profit before tax (18,000)
    Tax 0
    Net Profit (18,000)

    Balance Sheet as on January 31, 2008 & 2007


    Liabilities 2008 2007
    Shareholders’ Funds :
    Equity Share Capital 1,55,000 85,000
    Retained Earnings 1,02,000 1,20,000
    Total Shareholders’ Funds 2,57,000 2,05,000
    Long Term Liabilities:
    14 % Debentures 97,000 57,000
    Unsecured Loans 1,81,000 1,91,000
    Total Long Term Liabilities 2,78,000 2,48,000
    Current Liabilities:
    Bills Payable 6,000 9,000
    Creditors 24,000 1,78,000
    Income tax Payable 9,000 17,000
    Total Current Liabilities 39,000 2,04,000
    Total Liabilities 5,74,000 6,57,000
    Assets
    Fixed Assets:
    Plant & Machinery at Cost 7,20,000 5,40,000
    Less: Accumulated Depreciation 3,62,000 3,05,000
    Total Fixed Assets (net) 3,58,000 2,35,000
    Investments 18,000 66,000
    Current Assets :
    Inventories 1,51,000 1,19,000
    Debtors 29,000 1,66,000
    Prepaid expenses 6,000 2,000
    Cash & Cash Equivalents 12,000 69,000
    Total Current Assets 1,98,000 3,56,000
    Total Assets 5,74,000 6,57,000
    Additional information:

    1. Sold machinery for Rs.10,000 (cost Rs.45,000 and accumulated depreciation of


    Rs.32,000)
    2. Part of the machinery was purchased in exchange for secured debentures - Rs.75,000.
    3. Purchased investments for cash.Rs.30,000
    4. Sold investments for cash Rs.85,000 (cost Rs.78,000)
    5. Converted secured debentures to equity shares Rs.20,000.
    6. Redeemed secured debentures Rs,15,000.
    Prepare the cash flow statement using Indirect Method

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