Question 1.

Calculate the Funds from Operations from the following Profit and Loss Account : Profit and Loss Account To Salaries Rs. 5000 By Gross Profit Rs.50,000 To Rent 3,000 By Profit on sale of Buildings: To Depreciation on 5,000 Book value Rs 15,000 plant 10000 To Printing and 3,000 Sold for 5,000 stationary To Preliminary 2,000 expenses written off To Goodwill written 3,000 off To Provision for tax 4,000 To proposed 6,000 dividends To Net profit taken 24,000 to Balance Sheet 55,000 55,000

Question 2.The Balance Sheets of ABC Co as at the end of 1997 and 1998 are given below : Liabilities Share Capital Share premium General Reserve Profit&loss A/c 12%Debentures Prov for depreciation on plant Prov for depreciation on furniture Prov for Taxation Sundry Creditors 1997 Rs. 1,00,000 50,000 10,000 70,000 50,000 1998 Rs. 1,50,000 5,000 60,000 17,000 50,000 56,000 Assets Freehold Land Plant at cost Furniture at cost Investments at cost Debtors Stock 1997 Rs. 1,00,000 1,04,000 7,000 60,000 30,000 60,000 1998 Rs. 1,00,000 1,00,000 9,000 80,000 70,000 65,000

5,000

6,000

Cash

30,000

45,000

20,000 86,000 3,91,000

30,000 95,000 4,69,000 3,91,000 4,69,000

A plant purchased for Rs 4,000( Depreciation Rs.2,000) was sold for cash for Rs.800 on September 30,1998.On June 30,1998 an item of furniture was purchased for Rs 2,000.These were the only transactions concerning fixed assets during 1998.A dividend of 22 % on original shares was paid. You are required to prepare a Funds Flow Statement and verify the results by preparing a Schedule of Changes in Working Capital. Question 3.From the following Balance sheets of X ltd as on 31st December 1995 and 1996 you are required to prepare: a) A Schedule of changes in Working capital b) A funds flow statement Liabilities Share Capital General Reserve Profit&loss A/c Sundry Creditors Bills Payable Prov for Taxation Prov for doubtful Debts 1995 Rs. 1,00,000 14,000 16,000 8,000 1,200 16,000 400 1996 Rs. 1,00,000 18,000 13,000 5,400 800 18,000 600 Assets Goodwill Building Plant Investments Stock Bills Receivable Debtors 1995 Rs. 12,000 40,000 37,000 10,000 30,000 2,000 18,000 1996 Rs. 12,000 36,000 36,000 11,000 23,400 3,200 19,000 15,200 1,55,800

Cash at Bank 6,600 1,55,600 1,55,800 1,55,600 The following information has also been given : i) Depreciation charged on plant was Rs 4000 and on Building Rs 4000 ii) Provision for taxation of Rs 19,000 was made during the year 1996 iii) Interim dividend of Rs.8,000 was paid during the year 1996

Question 4.From the following Profit and Loss Account, you are required to compute Cash from Operations: Profit &Loss Account For the year ending 31st December 1998 To Salaries To Rent To Depreciation To Loss on Sale of plant To Goodwill written Rs. 5000 1,000 2,000 1,000 4,000 By Gross Profit By Profit on sale of Land By Income Tax refund Rs.25,000 Rs.5000 3,000

off To Provision for tax To proposed dividends To Net profit

5,000 5,000 10,000 33,000

33,000

Question 5.Prepare Cash Flow Statement from the following Balance Sheets of XL Engineering Ltd: Liabilities Share Capital Reserves P&L Appropriation A/c Provision for Dividends Creditors Bank Overdraft Bills Payable Loan on Mortgage 1997 Rs. 17,00,000 40,000 1,00,000 1998 Rs. 18,35,000 83,700 1,30,000 Assets 1997 Rs. Buildings 8,00,000 Plant&Machinery 2,50,000 Fixtures&Fittings 5,000 1998 Rs. 10,00,000 3,70,000 6,000

70,000 1,00,000 8,000 14,000 10,000

50,000 95,000 18,000 13,000 70,000

Cash Debtors Accounts Receivable Stock Prepaid Expenses Investments Goodwill Preliminary Expenses

2,000 1,00,000 8,000 4,00,000 3,000 1,64,000 3,00,000 10,000

2,200 45,000 9,000 3,43,700 3,100 1,70,000 3,43,700 2,000

26,42,000 22,94,700 26,42,000 22,94,700 a) Depreciation is charged on building at 3 percent of cost of Rs 9,00,000;on Plant and achinery at 8 percent of cost Rs.4,00,000,Fixtures and Fittings at 5 percent of cost of Rs.8,000. b) Investments were purchased and interest received Rs.3,000 was used in writing down the book value of investments c) The declared dividend for 1997 was paid and interim dividend for Rs 20,000 paid out of Profit & Loss Appropriation account.

Question 6. Compute cash from operations from the following figures: i) Profit for the year 1998 is a sum of Rs 10,000 after providing for depreciation of Rs.2,000

ii)

The current assets/liabilities of the business for the year ending 31st December 1997 and 1998 are as follows: 31st December,1997 31st December,1998 Sundry Debtors Rs.10,000 12,000 Provision for doubtful 1,000 1,200 debts Bills receivable 4,000 3,000 Bills Payable 5,000 6,000 Sundry Creditors 8,000 9,000 Inventories 5,000 8,000 Short term 10,000 12,000 Investments Outstanding Expenses 1,000 1,500 Prepaid Expenses 2,000 1,000 Accrued Income 3,000 4,000 Income received in 2,000 1,000 advance