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Accountancy 3 Marks Question

Cash Flow Statement · CBSE STD 12 Commerce (CBSE - English Medium). 11 questions.

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Question 13 Marks
What is meant by outflow of cash while preparing Cash Flow Statement?
Answer
Cash Outflow arises when the net effect of transaction is decrease in the amount of Cash and Cash Equivalents.
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Question 23 Marks
Classify the following transaction as Operating Activities for a finanical company and a non-financial company:
  1. Purchase of shares on a stock Exchage.
  2. Dividend received on Shares.
  3. Dividend paid on shares
  4. Loans given.
  5. Loans takes.
  6. Interest paid on borrowings.
Answer
 
OPERATING ACTIVITY
 
Financial Company
Non-Financial Company
(a)
Purchase of Shares on a Stock Exchange
-
(b)
Dividend received on shares
-
(d)
Loans given
-
(e)
Loans taken
-
(f)
Interest paid on borrowings
-
A financial company deals with securities like shares, bonds, debentures, etc on a regular basis. These securities form part of their stock and hence purchase and sale of these securities will be categorised under Operating Activity. But, Dividend paid by them will be the part of Financing Activities.
However, for a non-financial company issue of shares, debentures, etc form part of financing activities as such issue will increase the capital employed in the business.
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Question 33 Marks
Identify the transactions as belonging to:
  1. Operating Activities.
  2. Investing Activities.
  3. Financing Activities.
  4. Cash and Cash Equivalents.
  1. Cash Sale of Goods.
  2. Cash Received against Revenue from Services rendered.
  3. Cash Purchase of Goods.
  4. Cash Paid against Services Taken.
  5. Patents Purchased.
  6. Marketable Securities.
  7. Bank Overdraft.
  8. Proceeds from Issue of Debentures.
  9. Purchase of Shares.
  10. Repayment of Long-term Loan.
  11. Commission Received.
  12. Redemption of Debentures.
  13. Interest on Debentures.
  14. Interest on Investments.
  15. Income Tax Paid.
  16. Income Tax Paid on Gain of Sale of Asset.
  17. Cash Received from Debtors.
  18. Cash Paid to Creditors.
Answer
OPERATING ACTIVITY
INVESTING ACTIVITY
FINANCING ACTIVITY
CASH AND CASH EQUIVALENTS
(a). Cash Sale of Goods
(e). Patents Purchased
(g). Bank Overdraft
(f). Marketable Securities
(b). Cash Received against Revenue from Services rendered
(i). Purchase of Shares
(h). Proceeds from Issue of Debentures
 
(c). Cash Purchase of Goods
(n). Interest on Investments
(j). Repayment of Long-term Loan
 
(d). Cash paid against Services Taken
(p). Income Tax paid on Gain on Sale of Asset
(l). Redemption of Debentures
 
(k). Commission Received
 
(m). Interest on Debentures
 
(o). Income Tax paid
 
 
 
(q). Cash Received from Debtors
 
 
 
(r). Cash Paid to Creditors
 
 
 
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Question 43 Marks
For each of the following transactions, calculate the resulting Cash Flow and state the nature of Cash Flow, i.e. whether it is Operating, Investing or Financing:
  1. Acqured machinery for ₹ 2,50,000 paying 20% by cheque and executing a bond for the balance payable.
  2. Paid ₹ 2,50,000 to acqire shares in Informa Tech Ltd.and received a dividend of ₹ 50,000 after acquisition.
  3. Sold machinery of original cost of ₹ 2,00,000 with an accumulated depreciation of ₹ 1,60,000 for ₹ 60,000.
Answer
  1. Investing Activity: 50,000
  2. Investing Activity: 2,00,000
  3. Investing Activity: 60,000
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Question 53 Marks
Give the classification of the Cash Flow for preparing Cash Flow Statement.
Answer
As per Accounting Stnndard-3 (Revised) changes resulting in inflows and outflows of Cash are classified into three types of activities namely:
  1. Cash Flows from Operating Activities.
  2. Cash Flows from Investing Activities.
  3. Cash Flows from Financing Activities.
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Question 63 Marks
Following are the extracts from the Balance Sheet of MAH-Ltd. as at 31st March, 2018:
Particulars
31st March, 2018 ₹
31st March, 2017 ₹
Surplus, i.e., Balance in Statement of Profit and Loss
Dividend Payable
10,00,000
50,000
5,00,000
……
Additional Information: Proposed Dividend for the years ended 31st March, 2017 and 2018 are ₹ 4,00,000 and ₹ 5,00,000 respectively.
Prepare the Note to show Net Profit before Tax and Extraordinary Items.
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Question 73 Marks
State which of the following would result in inflow/ outflow or no flow of cash and cash Equivalesnts:
  1. Sale of Fixed Assests, Book value ₹ 1,00,000 at profit of ₹ 10,000.
  2. Sale fof goods aganits cash.
  3. Purchase of machinery for cash.
  4. Purchase of Land and Building for ₹ 10,00,000. Consideration paid by issue of debentures.
  5. Issued fully paid Bonus Shares.
  6. Cash withdrawn form Bank
  7. Payment of Interim Dividend.
  8. Proposed Dividend.
Answer
Inflow
Outflow
No Flow
(a). Sale of Fixed Assets
(c). Purchase of Machinery for cash
(d). Purchase of Land and Building. Consideration paid by issue of Debentures.
(b). Sale of goods against cash
(g). Payment of Interim Dividend
(e). Issued fully paid bonus shares
 
 
(f). Cash withdrawn from Bank
 
 
(h). Proposed Dividend
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Question 83 Marks
State any two objectives of preparing 'Cash Flow Statement'.
Answer
The objectives of Cash Flow Statement are:
  • To determine the sources (receipts) of Cash and Cash Equivalents under operating, investing and financing activities of the enterprise.
  • To determine applications (payments) of Cash and Cash Equivalents under operating, investing and financing activities of the enterprise.
  • To determine net change in Cash and Cash Equivalents being the difference between sources (receipts) and applications (payments) under operating, investing and financing activities between the dates of two Balance Sheets.
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Question 93 Marks
What is Cash Flow Statement? What are the objectives of preparing it?
Answer
Cash Flow Statement is a statement that shows inflows (receipts) and outflows (payments) of Cash and Cash Equivalents of an enterprise during a specified period of time.
The objectives of Cash Flow Statement are:
  • To determine the sources (receipts) of Cash and Cash Equivalents under operating, investing and financing activities of the enterprise.
  • To determine applications (payments) of Cash and Cash Equivalents under operating, investing and financing activities of the enterprise.
  • To determine net change in Cash and Cash Equivalents being the difference between sources (receipts) and applications (payments) under operating, investing and financing activities between the dates of two Balance Sheets.
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Question 103 Marks
Calculate Net Profit before Tax and Extraordinary Items of Premier Sales Ltd. from its Balance Sheet as at 31st March, 2018:

Additional Information:
  1. Proposed Dividend for the years ended 31st March, 2017 and 2018 are ₹ 50,000 and ₹ 75,000 respectively.
  2. Interim Dividend paid during the year was ₹ 10,000.
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Question 113 Marks
Following is the extract from the Balance Sheet of Zee Ltd.:
Particulars
31st March, 2018 ₹
31st March, 2017 ₹
Equity Share Capital
10% Preference Share Capital
Surplus, i.e., Balance in Statement of Profit and Loss
Unpaid Dividend
8,00,000
6,00,000
7,20,000
20,000
8,00,000
6,00,000
4,00,000
……
Additional Information:
  1. Proposed equity dividends for the year 2016-17 and 2017-18 are ₹ 1,60,000 and 2,00,000 respectively.
  2. An Interim Dividend of ₹ 40,000 on Equity Shares was paid.
Show Net Profit before Tax and Extraordinary Items.
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