61

|Ans : Increase in W.C.- 52,530, TradingProfit- Rs. 91.310, Fund Flow Statement- Rs. 1,41,310
(underall resources' concept).|
|Hints : Purchase of Plant Rs. (5,650 + 18,360) - Rs. 24,010, Purchase of Goodwill Rs. 10,000,
Payment of Dividend Rs. 26,000, Issue of Share Capital Rs. 50,000.]
25. Following are the comparative Balance Sheets of Good Luck Co. as at 31st December :
Liabilities 1998 1999 Assets 1998 1999
Rs. Rs. Rs. Rs.

Share Capital 10,00,000 11,00,000 Goodwill 50,000 40,000

Debentures 5,00,000 3,00,000 Land & Building 4,20,000 6,60,000
General Reserve 2,00,000 2,00,000 Plant & Machinery 6,00,000 8,00,000
Profit & Loss 1,10,000 1,90,000 Stock 2,50,000 2,10,000
Income Tax Provisions 40,000 1,10,000
Creditors 50,000 40,000 Debtors 3,00,000 2,40,000
Bills Payable 20,000 30,000 Cash 3,00,000 24,000
Provision for Doubtful Debts 30,000 24,000 Preliminary expenses 30,000 20,000
19,50,000 19,94,000 19,50,000 19,94,000

AdditionalInformation :
() During the year 1999, a part of machinery costing Rs. 7,500 (Accumulated depreciation there
on being Rs. 2,500) was sold for Rs. 3,000.
(ii) Dividend for Rs. 1,00,000 was paid during the year ended 31December, 1999.
(iii) Income Tax Rs. 50,000was paid during the year 1999.
(iv) Depreciation for the year 1999 was provided as follows.
Rs.
Land and Buildings 10,000
Plant and Machinery 50,000
You are required to prepare
(a) A Schedule of Changes in Working Capital and
(b) A Statement Showing the Sources and Application of Funds.
[Ans : Decrease in W.C.- Rs. 3,70,000, Trading Profit- Rs. 3,82,000, Fund Flow Statement
Total- Rs. 8,55,000.]
[Hints :Purchase of Land &Building- Rs. 2,50,000, Purchase of Plant &Machinery- Rs. 2,55,000,
Redemption of Debentures- Rs. 2,00,000, Issue of Share Capital- Rs. 1,00,000.]
26. From the following Balance Sheets and other information prepare a Fund Flow Statement for
1999:
Balance Sheets as at 31st December

Liabilities 1998 1999 Assets 1998 1999

Rs. Rs. Rs. Rs.

1,50,000 1,75,000 Fixed Assets (net) 2,55,000 3.10,000
Share Capital (Equity) 40,000
Preference Share Capital 1,00,000 50,000 Investments 15,000
Reserve 55,000 75,000 Current Assets 1,20,000 1,87,500
50,000 1,35,000 Discount on
5% Debentures
25,000 Debentures 5,000 2,500
Capital Redemption Reserve
Provision for Doubtful Debt 5,000 7,500
-rent Liabilities 35,000 72,500
5.40,000 3.95,000 5,40,000
3,95,000
 (b) Preference Shale
Dividend @ 15% was paid on Equity Shares for the year 1998.
(c) 31.12.98 was written up to its cost Ra so oo
iA) Stock which was valued at Rs. 45,000 as on
A/c for 1999 |B.U. (Hons. in Banking & Finance)
preparing the Profit & Loss
IAns : Increase in W.C.- Rs. 22,500, Trading Profit Rs. 1,00,000, Fund Flow Statenment To
Rs. 2,22,500.]
IHints : Purchase of Fixed Assets Rs. 1,00,000, Purchase of Investment Rs. 25,000, Redemption
Pref. Shares at a premium Rs. 52,500, Payment of Dividend Rs. 22,500, Issue of Equity Shares
25,000, Issue of Debentures Rs. 85,000, Loss on sale of Plant Rs. 7,500.]
27. From the following balance sheets and information of Everest Ltd. for 1998 and 1999, dra
out afunds flow statement and statement of changes in working capital for 1999.
Balance Sheets of Everest Ltd.

1998 1999
Rs. Rs.
Liabilities
Equity Share Capital 2,00,000
8% Pref. Share Capital
(redeemable) 1,00,000
3,00,000
General Reserve 50,000
Capital Reserve 20,000 30,000
Profit & Loss Account 25,000
Proposed Dividend 18,000 27,000
Sundry Creditors 28,000 39,000
Bills Payable 25,000 47,000
Liabilities for Expenses 10,000 6,000
ProvisiÑn for Taxation 8,000 6,000
28,000 32.000
AssetsS 4,37,000 S,62,000
Goodwill
Land and Building 50,000
Plant 40,000
Trade Investment 1,00,000 75,000
90,000 1,91,000
Sundry Debtors 10,000
Stock 35,000
Bills Receivable
60,000 90,000
Cash in Hand
85,000 78,000
Cash at Bank 15,000 18,000
7,000 6,000
Preliminary Expenses 10,000 22,000
10,000 7.000
(a) In 1999 Rs. 18,000 4,37,000 5,62,000
has been charged on Land depreciation has been written off from Plant
and Building. Account and no depreciatio
(b) A piece of land has been sold out and the
and sales being transferred to balance has
Capital Keserve. Tlhere is no otherbeen revalued, profits on
revaluation
(c) A plant was sold for Rs. 12,000 (W.D.V Rs. 15.00o). entry in Canital Reserve Accou
(d) Dividend received amounted to Rs. 2,100 which
(e) An includes Rs. 600 pre-acquisition dividend.
interim dividend of Rs. 10,000 has been paid in 1990
[C. S. Inter, -Adapted]