 Sale of land (book value

Question 1: Comprehensive Cash

₹1,20,000) at ₹1,80,000
Flow Statement (Indirect Method)
 Dividend received on investment:
Given: The following balances are extracted ₹15,000
from the books of Galaxy Ltd.  Purchase of shares in another
company: ₹1,50,000
 Net Profit for the year ended 31st  Interest received on debentures
March, 2025: ₹2,50,000 held: ₹8,000
 Depreciation on machinery:
₹50,000 Required: Calculate Net Cash Flow from
 Goodwill written off: ₹20,000 Investing Activities with necessary
workings.
 Gain on sale of machinery:
₹10,000
 Decrease in inventories: ₹15,000
 Increase in trade receivables: Question 3: Cash Flow Statement
₹25,000 Preparation
 Increase in trade payables:
₹18,000 From the following Balance Sheets of
Rising Ltd. as on 31st March 2024 and
 Income tax paid: ₹30,000
31st March 2025, prepare a Cash Flow
 Dividend paid: ₹40,000 Statement as per AS-3 using the Indirect
Method. Extracts (in ₹):
Required: Prepare a Cash Flow from
Operating Activities section using the
Particulars 2024 2025
Indirect Method.
Share Capital 5,00,000 6,00,000
General Reserve 1,00,000 1,50,000
Question 2: Cash Flows from Machinery 4,00,000 5,50,000
Investing Activities Accumulated 80,000 1,00,000
Depreciation
From the following, calculate Cash Flows
Trade Payables 70,000 60,000
from Investing Activities for Moon Ltd.:
Inventories 90,000 1,10,000
 Purchase of machinery: ₹6,00,000

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Particulars 2024 2025  Net cash from operating activities:
₹3,00,000
Trade Receivables 50,000 40,000
 Net cash used in investing
Bank Loan (long- 2,00,000 1,50,000 activities: ₹(2,50,000)
term)
 Net cash from financing activities:
Cash and Bank 30,000 60,000 ₹50,000 However, the cash in
Balances hand at the beginning of the year
was ₹80,000 and at the end it is
Additional Information: ₹60,000.

 Dividend of ₹20,000 was paid Required: (a) Identify and explain the
during the year. possible reasons for the decline in cash
 Depreciation on machinery was despite positive net cash from operations. (b)
₹40,000. List any four specific investing activities
that may have led to the above outcome.
 A piece of machinery was sold for
₹30,000 (Book value ₹20,000).

Question 6: Full Cash Flow Statement

Question 4: Classification and from Balance Sheet From the following
Treatment in Cash Flow Balance Sheet of Ramesh Ltd., prepare a
Cash Flow Statement for the year ended 31st
Classify the following transactions under March, 2025 using the indirect method.
Operating, Investing or Financing
Activities as per AS-3 and explain Balance Sheet (₹ in thousands)
treatment in the Cash Flow Statement:
Particulars 31.03.2024 31.03.2025
 Interest received on investments
by a non-financial company Equity Share 5,00 6,00
Capital
 Proceeds from issue of equity
shares General Reserve 80 1,00
 Purchase of building Profit and Loss 1,50 2,20
 Payment of final dividend Account
 Decrease in prepaid expenses 12% Debentures 3,00 2,00
 Profit on sale of investments Creditors 1,20 1,00
 Redemption of debentures
Fixed Assets 6,00 7,00
 Income tax paid on profit from
sale of land Investments 1,00 1,20
 Sale of marketable securities Debtors 1,50 1,70
 Amortisation of goodwill Cash and Bank 2,00 2,30

Additional Information: (i) Depreciation

Question 5: Analytical Case Study charged during the year was ₹70 thousand.
(Cash Flow Insight) (ii) A machine costing ₹80 thousand (book
value ₹50 thousand) was sold for ₹60
The Cash Flow Statement of Titan Ltd. thousand. (iii) Dividend paid during the year
shows the following: was ₹30 thousand.

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 Question 9: Preparation of Cash Flow
from Profit and Loss Statement and
Question 7: Cash Flow from Operating Additional Data From the following Profit
Activities Only (Indirect Method) Prepare and Loss Account and additional
the cash flow from operating activities information, compute cash from operating
section using indirect method from the activities.
following:
Statement of Profit and Loss for the year
 Net Profit after tax: ₹2,00,000 ended 31st March, 2025
 Depreciation: ₹35,000
 Revenue from Operations:
 Loss on sale of machinery:
₹12,00,000
₹10,000
 Profit on sale of investments:  Other Income: ₹80,000
₹5,000
 Increase in inventories: ₹20,000  Expenses:
 Decrease in trade receivables:
₹15,000 o Cost of goods sold:
₹6,00,000
 Increase in outstanding expenses:
₹5,000 o Employee benefits:
₹2,00,000
 Decrease in trade payables: ₹8,000
o Depreciation: ₹70,000
 Income tax paid during the year:
o Administrative
₹25,000
Expenses: ₹1,50,000
o Loss on sale of fixed
assets: ₹10,000
Question 8: Computation of Investing and
Financing Activities From the following  Income Tax: ₹50,000
information of Niharika Ltd., calculate cash
flows from investing and financing Additional Information: (i) Trade
activities: receivables decreased by ₹20,000 (ii)
Inventories increased by ₹15,000 (iii) Trade
 Purchase of building: ₹8,00,000 payables increased by ₹10,000 (iv)
 Sale of equipment (book value Outstanding salary increased by ₹5,000
₹60,000) for ₹75,000
 Interest received on investment:
₹20,000 Question 10: Analyze and Prepare Cash
 Dividend received: ₹15,000 Flow Statement from Comparative
 Issue of equity shares: ₹6,00,000 Balance Sheet From the following
comparative balance sheets of Classic Ltd.,
 Redemption of preference shares:
prepare a cash flow statement using indirect
₹3,00,000
method.
 Payment of dividend: ₹40,000
 Repayment of bank loan: Balance Sheet (₹ in lacs)
₹2,00,000
 Interest paid: ₹35,000 Particulars 2024 2025
Equity Share Capital 100 120

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Particulars 2024 2025
Surplus in P&L 30 50 Question 12: Calculation of Net Cash
Debentures 40 20 Flow from Operating Activities Using the
following information, calculate net cash
Trade Payables 20 30
from operating activities:
Fixed Assets 120 140
Investments 30 40  Net Profit after tax: ₹1,20,000
 Income tax paid: ₹30,000
Trade Receivables 20 10
 Depreciation: ₹15,000
Bank Balance 20 30
 Goodwill amortized: ₹10,000
Additional Information: (i) Fixed assets  Loss on sale of fixed assets:
were purchased for ₹40 lacs and sold for ₹20 ₹5,000
lacs (book value ₹25 lacs). (ii) Dividend of  Increase in inventories: ₹25,000
₹10 lacs was paid. (iii) Depreciation during  Decrease in trade receivables:
the year was ₹10 lacs. ₹10,000
 Increase in trade payables:
₹15,000
Question 11: Prepare Cash Flow  Decrease in outstanding wages:
Statement from Balance Sheet and ₹5,000
Additional Details From the following
Balance Sheet of Modern Ltd. as on 31st
March 2024 and 2025, prepare a Cash Flow Question 13: Analyze and Prepare
Statement using the Indirect Method. Investing and Financing Activities From
the given data, compute cash flows from
Particulars 2024 (₹) 2025 (₹) investing and financing activities:
Equity Share Capital 5,00,000 6,00,000
 Sale of investment (book value
General Reserve 1,00,000 1,20,000 ₹40,000) at ₹60,000
10% Debentures 2,50,000 1,50,000  Purchase of machinery ₹2,00,000
Trade Payables 80,000 70,000  Sale of vehicle (book value
₹70,000) at ₹65,000
Outstanding 20,000 30,000
Expenses  Dividend paid ₹50,000
 Issue of debentures ₹1,50,000
Fixed Assets 6,00,000 6,50,000
 Interest paid on debentures
Investments 80,000 1,00,000 ₹20,000
Debtors 90,000 1,10,000  Repayment of bank loan ₹1,00,000
Bank Balance 1,80,000 1,10,000  Interest received on investments
₹12,000
Additional Information: (i) Depreciation
charged ₹40,000 (ii) Dividend paid ₹20,000
(iii) A machine costing ₹50,000 Question 14: Full Cash Flow Statement
(accumulated depreciation ₹10,000) was with Profit & Loss and Balance Sheet
sold at ₹30,000 Adjustments From the following, prepare a

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cash flow statement using the indirect Question 16: Preparation of Cash
method: Flow Statement from Financial
Statements
Extract of Profit & Loss Account:
From the following Balance Sheet of
 Net Profit after Tax: ₹2,40,000 Zenith Ltd. as on 31st March 2024 and
 Depreciation: ₹60,000 2025, prepare a Cash Flow Statement
 Loss on sale of building: ₹15,000 using the indirect method:
 Provision for taxation: ₹45,000
31.03.2024 31.03.2025
Comparative Balance Sheet Figures: Particulars (₹) (₹)
Equity Share 5,00,000 6,00,000
Particulars 2024 (₹) 2025 (₹) Capital
Trade Receivables 1,50,000 1,70,000 General 1,00,000 1,50,000
Inventories 2,00,000 1,80,000 Reserve
Trade Payables 80,000 90,000 Profit & Loss 1,20,000 1,90,000
Account
Additional Info: (i) Building sold at 12% 2,00,000 1,00,000
₹1,35,000 (book value ₹1,50,000) (ii) Debentures
Purchase of plant ₹2,00,000 (iii) Dividend
Trade Payables 90,000 70,000
paid ₹60,000
Fixed Assets 8,00,000 9,50,000
(Gross)
Accumulated 2,00,000 2,60,000
Question 15: Case-Based Cash Flow
Depreciation
Interpretation and Preparation Using the
given details, prepare a cash flow statement Inventories 1,20,000 1,00,000
(Indirect Method) and comment on the Trade 1,50,000 1,20,000
company’s cash position: Receivables
 Profit before tax: ₹3,00,000 Cash and Bank 40,000 30,000
 Depreciation: ₹75,000
Additional Information:
 Profit on sale of furniture: ₹10,000
 Interest paid: ₹20,000  Dividend paid during the year
 Income tax paid: ₹60,000 ₹50,000
 Purchase of land: ₹2,50,000  A machine with original cost
₹1,00,000 and accumulated
 Sale of investments: ₹80,000
depreciation ₹60,000 was sold for
 Issue of shares: ₹2,00,000 ₹45,000
 Redemption of preference shares:
₹1,00,000
 Final dividend paid: ₹40,000

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Question 17: Computation of Cash Question 19: Cash Flow from
Flow from Operating Activities Only Investing and Financing Activities
From the following details, calculate Net From the following information, compute
Cash Flow from Operating Activities cash flows from investing and financing
(Indirect Method): activities:

 Net Profit after tax: ₹1,80,000  Purchase of building: ₹5,00,000

 Income tax paid: ₹40,000  Sale of machinery (book value
 Depreciation: ₹30,000 ₹80,000) for ₹90,000
 Amortization of goodwill: ₹15,000  Dividend paid: ₹60,000
 Profit on sale of fixed asset:  Issue of equity shares: ₹3,00,000
₹10,000  Redemption of debentures:
 Increase in stock: ₹20,000 ₹2,00,000
 Decrease in trade receivables:  Interest paid: ₹25,000
₹10,000  Sale of investments: ₹50,000
 Increase in outstanding expenses:  Purchase of land: ₹1,50,000
₹5,000
 Decrease in creditors: ₹8,000
Question 20: Full Cash Flow
Statement Including All Activities
Question 18: Identify and Classify
Cash Flows Given the following details, prepare a
Cash Flow Statement using the Indirect
Classify the following items under Method:
Operating, Investing, or Financing
Activities as per AS-3 and explain the  Net Profit before tax: ₹4,50,000
treatment in the Cash Flow Statement:  Depreciation: ₹70,000
 Goodwill written off: ₹20,000
 Sale of old machine at a loss of
 Profit on sale of furniture: ₹10,000
₹5,000
 Interest received by a  Increase in trade receivables:
manufacturing company ₹25,000
 Issue of preference shares  Decrease in trade payables:
₹15,000
 Redemption of debentures
 Income tax paid: ₹1,00,000
 Purchase of investments
 Dividend received  Sale of fixed asset: ₹80,000
 Purchase of inventory  Purchase of machinery: ₹2,00,000
 Rent received on investment  Issue of shares: ₹2,50,000
property  Redemption of preference shares:
 Interest paid on debentures ₹1,00,000
 Tax paid on capital gains  Dividend paid: ₹75,000

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Question 21: Comprehensive Cash  Net Profit before tax: ₹3,60,000
Flow Statement from Balance Sheet  Depreciation: ₹60,000
and Adjustments  Amortisation of intangible assets:
₹20,000
Prepare a Cash Flow Statement (Indirect
 Interest paid on debentures:
Method) from the following balance sheet of
Suyash Ltd.: ₹15,000
 Interest received: ₹10,000
31.03.2024 31.03.2025  Gain on sale of equipment: ₹5,000
Particulars (₹) (₹)  Increase in inventories: ₹30,000
Equity Share 4,00,000 5,00,000  Decrease in trade receivables:
Capital ₹15,000
General 1,50,000 2,00,000  Increase in accrued expenses:
Reserve ₹5,000
Profit and 2,00,000 2,80,000  Income tax paid: ₹50,000
Loss A/c
10% 1,50,000 1,00,000
Debentures
Question 23: Prepare Cash Flow from
Investing Activities Only
Creditors 70,000 60,000
Land and 3,50,000 4,00,000 From the following transactions of Red Star
Building (Net) Ltd., calculate the Cash Flows from
Investing Activities:
Plant and 2,00,000 2,80,000
Machinery  Machinery purchased for
(Net) ₹5,00,000
Trade 1,20,000 1,00,000  Sold furniture costing ₹1,00,000
Receivables (accumulated depreciation
Inventories 1,30,000 1,40,000 ₹60,000) at ₹50,000
 Interest received on investments:
Cash and Bank 70,000 1,00,000 ₹18,000
 Dividend received: ₹12,000
Additional Information:
 Purchased land and building for
 Depreciation charged: ₹40,000 ₹3,00,000
 Dividend paid: ₹50,000  Proceeds from sale of investment:
 Land was sold at a loss of ₹20,000 ₹1,50,000
(book value ₹1,20,000, sold for
₹1,00,000)
Question 24: Classification and Cash
Flow Impact Analysis
Question 22: Calculate Net Cash from
Classify the following under Operating,
Operating Activities Only (Indirect Investing, or Financing Activities and state
Method) whether the item causes Cash Inflow, Cash
Outflow, or No Flow:
From the given data, calculate Net Cash
Flow from Operating Activities:

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  Issue of bonus shares
 Interest received on fixed deposits
 Sale of old equipment at loss Question 26: Complete Cash Flow
 Dividend paid Statement from Balance Sheet
 Redemption of preference shares Prepare a Cash Flow Statement using the
 Purchase of trade inventory indirect method from the following balance
 Repayment of short-term bank sheet of Galaxy Ltd.
loan
 Increase in prepaid insurance 31.03.2024 31.03.2025
 Purchase of software licenses Particulars (₹) (₹)
 Commission received from Equity Share 4,00,000 5,00,000
customers Capital
Reserves and 2,00,000 2,80,000
Surplus
Question 25: Cash Flow Statement
12% 3,00,000 2,50,000
Preparation from Adjusted P&L and Debentures
Working Capital
Trade 60,000 50,000
Given: Payables
Fixed Assets 5,00,000 6,00,000
 Net profit before tax and (Net)
extraordinary items: ₹5,00,000
Investments 1,00,000 80,000
 Adjustments: Inventory 70,000 90,000
Trade 1,20,000 1,00,000
o Depreciation: ₹1,00,000
Receivables
o Interest paid: ₹20,000
Cash and 1,70,000 1,90,000
o Profit on sale of
Bank Balance
investment: ₹10,000
o Amortisation of
Additional Information: (i) Depreciation
goodwill: ₹15,000
charged during the year was ₹40,000 (ii)
 Changes in Working Capital: Dividend paid ₹60,000 (iii) A machine
costing ₹80,000 (accumulated depreciation
o Increase in inventory: ₹30,000) was sold for ₹45,000
₹30,000
o Decrease in trade
payables: ₹25,000
o Decrease in prepaid Question 27: Operating Activities –
expenses: ₹5,000 Indirect Method
o Increase in outstanding
wages: ₹10,000 Using the following data, calculate Cash
Flow from Operating Activities:
 Income tax paid: ₹75,000
 Net profit before tax and
Prepare the Cash Flow from Operating extraordinary items: ₹4,00,000
Activities using the Indirect Method.

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  Adjustments:  Proceeds from sale of fixed assets
 Interest paid on bank overdraft by
o Depreciation: ₹50,000 a trading company
o Interest on debentures:  Dividend received on investment
₹20,000 in shares
o Profit on sale of  Issue of equity shares to acquire
investments: ₹15,000 land
o Goodwill written off:  Repayment of term loan
₹10,000  Increase in trade payables
 Changes in Working Capital:  Loss on sale of machinery
 Rent paid on factory building
o Increase in trade
receivables: ₹20,000  Income tax refund
o Decrease in inventory:  Donation paid out of profits
₹25,000
o Increase in outstanding
salary: ₹5,000 Question 30: Full Cash Flow
 Income tax paid: ₹50,000 Statement Preparation from Adjusted
P&L and Working Capital Changes
Using the information below, prepare a Cash
Flow Statement (Indirect Method):
Question 28: Cash Flow from
Investing Activities Only  Net profit before tax: ₹6,00,000
From the following data, calculate Cash  Depreciation: ₹1,00,000
Flow from Investing Activities:  Interest paid on debentures:
₹25,000
 Purchase of machinery ₹2,50,000  Goodwill amortised: ₹15,000
 Sale of land for ₹1,20,000 (book  Profit on sale of investments:
value ₹1,50,000) ₹20,000
 Purchase of long-term investments  Income tax paid: ₹75,000
₹1,00,000
 Sale of investments: ₹1,50,000
 Sale of short-term marketable
 Purchase of plant: ₹2,00,000
securities ₹80,000
 Issue of equity shares: ₹2,50,000
 Interest received on investments
₹10,000  Redemption of preference shares:
₹1,00,000
 Dividend received ₹5,000
 Dividend paid: ₹70,000

Working Capital Changes:

Question 29: Classification of Cash
Flows and Justification  Increase in trade receivables:
₹30,000
Classify the following items as Operating,
 Decrease in inventories: ₹20,000
Investing, or Financing Activities as per AS-
3. Justify each classification briefly.  Increase in trade payables:
₹10,000

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  Interest on debentures: ₹20,000
 Amortisation of Patents: ₹10,000
Question 31: Cash Flow Statement  Profit on sale of machine: ₹15,000
from Comparative Balance Sheets
 Increase in inventory: ₹20,000
From the following Balance Sheet of Shakti  Decrease in trade receivables:
Ltd., prepare a Cash Flow Statement using ₹30,000
the Indirect Method.  Increase in outstanding wages:
₹5,000
31.03.2024 31.03.2025  Income tax paid: ₹60,000
Particulars (₹) (₹)
Equity Share 10,00,000 12,00,000
Capital Question 33: Cash Flow from
General 3,00,000 4,00,000 Investing and Financing Activities
Reserve
From the given data, calculate cash flows
Profit and 2,50,000 3,70,000 from investing and financing activities:
Loss Account
10% 4,00,000 3,00,000  Machinery purchased ₹4,00,000
Debentures  Building sold for ₹3,00,000 (book
Creditors 1,50,000 1,20,000 value ₹3,50,000)
Land and 6,00,000 7,00,000  Issue of equity shares ₹5,00,000
Building  Redemption of debentures
₹2,00,000
Machinery 5,00,000 6,50,000
 Interest paid on loan ₹30,000
Stock 2,00,000 1,50,000
 Dividend paid ₹75,000
Debtors 2,50,000 2,30,000  Investment purchased ₹1,00,000
Cash and 3,00,000 3,60,000  Interest received on investment
Bank ₹20,000

Additional Information: (i) Depreciation

charged during the year: ₹1,00,000 (ii) Question 34: Classification of Cash
Dividend paid: ₹1,00,000 (iii) Land was sold
Flow Items
at profit of ₹20,000 (book value ₹1,00,000)
Classify the following items as Operating,
Investing, or Financing Activities and state
whether they are Cash Inflow or Outflow:
Question 32: Compute Cash Flow
from Operating Activities Only  Dividend paid on equity shares
 Interest received by a non-
Using the following information, compute
financial company
Net Cash Flow from Operating Activities
(Indirect Method):  Sale of a long-term investment
 Issue of bonus shares
 Net Profit before tax: ₹4,00,000  Purchase of machinery
 Depreciation: ₹75,000  Purchase of inventory

422
  Interest paid on bank loan 31.03.2024 31.03.2025
 Sale of patents Particulars (₹) (₹)
 Rent received on investment Equity Share 8,00,000 10,00,000
property Capital
 Tax paid on gain from sale of
General 1,20,000 1,50,000
fixed assets
Reserve
Profit and Loss 3,00,000 4,40,000
Question 35: Prepare Operating Account
Activities with Adjustments for 12% 2,00,000 1,00,000
Working Capital Debentures
Creditors 1,50,000 1,20,000
From the following information, compute
Cash Flow from Operating Activities: Plant and 5,00,000 6,20,000
Machinery
 Net Profit before tax: ₹5,00,000 (Net)
Building 4,00,000 3,50,000
 Adjustments:
Stock 2,00,000 2,50,000
o Depreciation ₹1,20,000 Trade 2,20,000 2,30,000
o Loss on sale of Receivables
machinery ₹10,000 Cash and Cash 2,50,000 3,10,000
o Interest paid ₹15,000 Equivalents
o Interest received
₹12,000 Additional Information: (i) Depreciation
o Dividend received charged on machinery: ₹60,000 (ii) A
₹8,000 machine costing ₹1,00,000 (book value
₹70,000) was sold at a loss of ₹10,000 (iii)
 Changes in working capital:
Dividend paid during the year: ₹90,000
o Increase in stock
₹25,000
o Decrease in trade Question 37: Net Cash Flow from
receivables ₹18,000
Operating Activities
o Increase in outstanding
expenses ₹6,000 Calculate Net Cash Flow from Operating
o Decrease in trade Activities using the Indirect Method:
payables ₹10,000
 Income tax paid: ₹80,000  Net profit before tax: ₹5,00,000

Question 36: Prepare Cash Flow  Adjustments:

Statement from Balance Sheet
o Depreciation: ₹1,00,000
From the following Balance Sheet of Manav o Loss on sale of
Ltd., prepare a Cash Flow Statement using machinery: ₹15,000
the indirect method: o Interest paid: ₹25,000

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 o Interest received:  Sale of furniture (used in office) at
₹10,000 loss
o Dividend received:  Payment of income tax on capital
₹20,000 gain
 Working Capital Changes:  Dividend paid on preference
shares
o Increase in trade  Purchase of shares for investment
receivables: ₹40,000  Issue of equity shares for cash
o Decrease in inventories:  Rent received on building held as
₹30,000 investment
o Decrease in trade  Amortisation of goodwill
payables: ₹20,000
 Provision for tax
 Income tax paid: ₹1,00,000  Increase in prepaid insurance

Question 38: Cash Flows from Question 40: Prepare Operating

Investing and Financing Activities Activity Segment of Cash Flow
Statement
Using the data below, calculate Cash Flows
from Investing and Financing Activities: From the following data, prepare Cash Flow
from Operating Activities using the
 Purchase of equipment: ₹3,00,000 Indirect Method:
 Sale of land: ₹1,50,000 (book
 Profit before tax and
value ₹2,00,000)
extraordinary items: ₹4,20,000
 Investment in bonds: ₹1,20,000
 Dividend received: ₹18,000  Add:
 Proceeds from issue of equity
shares: ₹4,00,000 o Depreciation: ₹50,000
 Redemption of debentures: o Amortisation of
₹2,00,000 goodwill: ₹10,000
 Interest paid on long-term o Loss on sale of
borrowings: ₹25,000 machinery: ₹20,000
 Dividend paid: ₹1,00,000  Less:

o Interest income: ₹15,000

Question 39: Classify Transactions o Profit on sale of
investments: ₹25,000
with Reasoning
 Working Capital Changes:
Classify the following into Operating,
Investing, or Financing Activities under o Increase in inventories:
AS-3, and explain the reason for each ₹35,000
classification: o Decrease in trade
receivables: ₹30,000
 Payment of interest on term loan o Increase in outstanding
expenses: ₹10,000

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 o Decrease in trade Question 42: Cash Flow from
payables: ₹20,000 Operating Activities – Adjusted P&L
 Income tax paid: ₹70,000 Method
Calculate Cash Flow from Operating
Activities using the Indirect Method:
Question 41: Full Cash Flow
Statement from Comparative Balance  Net Profit before tax: ₹3,50,000
Sheets
 Adjustments:
Prepare a Cash Flow Statement using the
Indirect Method from the following o Depreciation: ₹60,000
comparative Balance Sheet of Devansh Ltd. o Loss on sale of
equipment: ₹10,000
31.03.2024 31.03.2025 o Interest paid: ₹15,000
Particulars (₹) (₹) o Dividend received:
Equity Share 6,00,000 8,00,000 ₹12,000
Capital o Interest received:
General 2,00,000 2,80,000 ₹10,000
Reserve  Working Capital Changes:
Profit & Loss 3,00,000 4,00,000 o Increase in stock:
A/c ₹20,000
10% 2,50,000 1,50,000 o Decrease in trade
Debentures receivables: ₹25,000
Trade 80,000 1,00,000 o Increase in trade
Payables payables: ₹15,000
Machinery 5,00,000 6,00,000  Income tax paid: ₹50,000
(Net)
Land and 3,00,000 3,50,000
Building Question 43: Investing and Financing
Inventories 2,00,000 1,80,000 Activities Analysis
Trade 1,20,000 1,00,000
Receivables Using the following transactions, prepare a
statement showing Cash Flows from
Cash and Cash 2,10,000 3,00,000 Investing and Financing Activities:
Equivalents
 Purchased building: ₹6,00,000
Additional Information:  Sold furniture for ₹90,000 (book
value ₹1,00,000)
 Depreciation on machinery
₹40,000  Interest received on investment:
₹20,000
 Dividend paid ₹70,000
 Dividend received: ₹15,000
 A machine with book value
₹60,000 was sold for ₹55,000  Issued equity shares for cash:
₹5,00,000

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  Paid dividend: ₹1,00,000  Interest on debentures:
 Redeemed preference shares: ₹40,000
₹2,00,000
 Repaid long-term loan: ₹3,00,000  Interest received: ₹20,000
 Paid interest on long-term loan:  Profit on sale of equipment:
₹25,000 ₹10,000

 Dividend paid: ₹1,20,000

Question 44: Classify and Explain
Cash Flow Items  Income tax paid: ₹1,00,000

Classify each of the following transactions  Equipment purchased:

into Operating, Investing, or Financing ₹3,50,000
Activities as per AS-3. Also, state the
impact (Inflow/Outflow/No flow):  Equipment sold: ₹80,000
 Issue of equity shares against  Issue of shares: ₹4,00,000
purchase of fixed assets
 Payment of interim dividend  Redemption of debentures:
 Income tax paid on sale of ₹2,00,000
investment
 Sale of investments held as cash  Working capital changes:
equivalents
 Bad debts written off o Decrease in trade
receivables: ₹25,000
 Repayment of lease liability
o Increase in stock:
 Interest received on bank deposits
₹40,000
 Payment of underwriting
o Increase in trade
commission on issue of shares
payables: ₹35,000
 Sale of used computer
 Advance received from customers
Question 46: Prepare a Cash Flow
Statement from Balance Sheet and
Question 45: Full Cash Flow Adjustments
Statement with Detailed Adjustments
Prepare a Cash Flow Statement using the
Using the data given below, prepare a Cash Indirect Method from the Balance Sheet of
Flow Statement (Indirect Method): Akash Ltd.
 Net profit before tax: ₹6,50,000 31.03.2024 31.03.2025
Particulars (₹) (₹)
 Depreciation: ₹1,00,000
Equity Share 6,00,000 8,00,000
 Amortisation of goodwill: Capital
₹30,000 General 1,50,000 2,20,000
Reserve

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 31.03.2024 31.03.2025 o Gain on sale of
Particulars (₹) (₹) machinery: ₹10,000
10% 2,00,000 1,00,000  Working Capital Changes:
Debentures
o Increase in stock:
Profit and 2,00,000 3,00,000 ₹20,000
Loss A/c o Decrease in trade
Creditors 70,000 50,000 receivables: ₹25,000
Land and 5,00,000 5,80,000 o Increase in outstanding
Building salary: ₹10,000
o Decrease in creditors:
Machinery 3,00,000 4,00,000
₹5,000
(Net)
 Income tax paid: ₹80,000
Stock 1,50,000 1,80,000
Trade 1,00,000 1,10,000
Receivables
Cash and 1,70,000 2,20,000 Question 48: Statement of Cash Flows
Bank from Investing and Financing
Activities
Additional Information:
From the following transactions of Anshika
 Depreciation on machinery during Ltd., prepare Cash Flows from Investing
the year was ₹40,000 and Financing Activities:
 A machine costing ₹80,000 (book
 Purchased plant for ₹3,00,000
value ₹50,000) was sold for
₹60,000  Sold equipment for ₹1,20,000
(book value ₹1,50,000)
 Dividend paid during the year
₹90,000  Dividend received ₹18,000
 Proceeds from issue of shares
₹4,00,000
Question 47: Calculate Cash Flow  Redeemed debentures ₹1,50,000
from Operating Activities (Indirect  Interest paid on debentures
Method) ₹25,000
 Dividend paid ₹1,00,000
Given the following details, compute Cash
Flow from Operating Activities:  Investment in land ₹2,00,000

 Net profit before tax: ₹6,00,000

Question 49: Classify the Following
 Adjustments: Transactions with Reasons
o Depreciation: ₹75,000 Classify the following into Operating,
o Interest paid: ₹30,000 Investing, or Financing Activities as per
o Amortisation of AS-3, and give a short reason:
goodwill: ₹25,000
 Interest received on investments
by a non-finance company

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  Sale of fixed assets
 Issue of equity shares
 Repayment of long-term loan
 Rent received from investment
property
 Purchase of inventory
 Dividend paid on equity shares
 Income tax paid
 Sale of intangible assets
 Provision for bad debts

Question 50: Complete Cash Flow

Statement from P&L and Working
Capital
Given the following, prepare Cash Flow
from Operating Activities (Indirect
Method):

 Net profit before tax: ₹7,00,000

 Add:

o Depreciation: ₹1,20,000
o Loss on sale of
machinery: ₹25,000
o Interest on loan: ₹35,000
 Less:

o Profit on sale of
investment: ₹20,000
o Interest received:
₹10,000
 Changes in Working Capital:

o Increase in stock:
₹40,000
o Decrease in trade
receivables: ₹20,000
o Increase in trade
payables: ₹15,000
 Income tax paid: ₹1,00,000

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