Prepare Cash Flow Statement Q3.The following is the summarized balance sheet of Michael Ltd.LIABILITIES20182019Equity Share Capital200000240000Debentures50000Securities Premium10000General Reserve3000050000Profit & Loss A/C4800068000Sundry CreditorsProposed DividendProvision for DepreciationPlant & Machinery1300001500002000024000140000150000Furniture60004000624000696000ASSETSLand & BuildingPlant & Machinery (Cost)Furniture (Cost)105000150000290000320000900010000Inventories130000105000Sundry DebtorsCash75000850001500026000624000696000ADDITIONAL INFORMATION:1. Furniture which cost Rs. 5,000, written down value Rs. 1,000 was sold during the year 2019for Rs. 2,000.2. Plant and Machinery which cost Rs. 20,000 and in respect of which Rs. 13,000 had beenwritten off as depreciation was sold during the year for Rs. 3,000.3. The dividend of 2018 was paid during 2019.You are required to prepare Cash Flow Statement.

Cash flows statements is a part of financial statements which shows the incoming and outgoing cash…

Answered: repare Cash Flow Statement

Business

Accounting

repare Cash Flow Statement

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Prepare Cash Flow Statement

Q3.
The following is the summarized balance sheet of Michael Ltd.
LIABILITIES
2018
2019
Equity Share Capital
200000
240000
Debentures
50000
Securities Premium
10000
General Reserve
30000
50000
Profit & Loss A/C
48000
68000
Sundry Creditors
Proposed Dividend
Provision for Depreciation
Plant & Machinery
130000
150000
20000
24000
140000
150000
Furniture
6000
4000
624000
696000
ASSETS
Land & Building
Plant & Machinery (Cost)
Furniture (Cost)
105000
150000
290000
320000
9000
10000
Inventories
130000
105000
Sundry Debtors
Cash
75000
85000
15000
26000
624000
696000
ADDITIONAL INFORMATION:
1. Furniture which cost Rs. 5,000, written down value Rs. 1,000 was sold during the year 2019
for Rs. 2,000.
2. Plant and Machinery which cost Rs. 20,000 and in respect of which Rs. 13,000 had been
written off as depreciation was sold during the year for Rs. 3,000.
3. The dividend of 2018 was paid during 2019.
You are required to prepare Cash Flow Statement.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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