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The income statement of the year ended December 31, 2004 for Javedan Manufacturing Company
contained the following condensed information:
Partial Balance Sheets of Javedan Manufacturing Company at December 31, 2004 and 2003 are given
below:
JAVEDAN MANUFACUTING COMPANY
COMPARATIVE BALANCE SHEETS (PARTIAL)
2004 2003
Particulars (Rs. in '000)
Cash 672 130
Accounts receivable 775 610
Inventories 834 867
Accounts payables 521 501
Additional information:
(1) Operating expenses include loss of Rs. 24,000 resulting from the sale of machinery for Rs.
270,000 in cash.
(2) Machinery was purchased at a cost of Rs. 750,000.
(3) Income tax of Rs. 353,000 represents the amount paid in 2004.
(4) Dividend declared and paid during 2004 amounted to Rs. 200,000.
Required:
Prepare a statement of cash flow for Javedan Manufacturing Company for the year ended December 31,
2004 under direct method using the format as prescribed by IAS – 7. (Marks 13)
Required:
Prepare a statement of cash flow for the year ended December 31, 2005 using indirect method as per
IAS – 7. (Marks 15)
Non-Current Assets
Land 71,000 110,000
Plant and equipment (PE) 265,000 200,000
Accumulated depreciation (PE) (67,750) (42,000)
268,250 268,000
Current Assets
Inventories 180,000 189,000
Accounts receivable 84,000 70,000
Allowance for doubtful debts (2,000) (4,000)
Cash and bank balances 67,000 22,000
329,000 277,000
Total Assets 597,250 545,000
The Statement of comprehensive income for the year ended December 31, 2011 is as follows:
(Rs. '000')
Sales 640,000
Cost of sales (380,000)
Gross profit 260,000
Operating expenses (155,000)
Operating income 105,000
Financial charges (20,000)
Gain on sale of equipment 250
Net income 85,250
Additional information:
(i) Accumulated depreciation including current year’s depreciation for overall property, plant and
equipment was Rs. 5,215,000 as on June 30, 2012 and Rs. 6,895,000 as on June 30, 2013.
(ii) Plant and machinery costing Rs. 235,000 and having a book value of Rs.143,000 was sold for
Rs.157,000 during 2013.
(iii) There was no addition and disposals of intangible assets during the year.
(iv) Advances, deposits and prepayments include interest receivable amounting to Rs. 125,000 on
June 30, 2012 and Rs. 150,000 on June 30, 2013.
(v) Short term investments are highly liquid with one to two month’s maturity.
(vi) The company issued one right share for 10 previously held shares at premium of 20% of the par
value.
(vii) Retained earnings in statement of financial position are after payment of dividend during the
year out of un-appropriate profit of the company.
(viii) Financial charges represent interest of Rs.452,000 on loans and include bank charges of Rs.
3,000 deducted by bank.
(ix) Payables, accrued and other liabilities include interest payable of Rs. 80,000 and Rs.75,000 as on
June 30, 2012 and June 30, 2013 respectively.
Required:
Prepare Statement of Cash flows for the year ended June 30, 2013 using indirect method including
reconciliation of cash and cash equivalent in accordance with IAS 7 Statement of Cash Flows. (Marks 25)
Required:
Statement of Cash flow for the year ended June 30, 2013 using indirect method in accordance with IAS
7. (Marks 20)
Other information:
(i) ‘Property, plant and equipment’, includes assets, which have been revalued during the year.
An Asset having written down value of Rs. 200,000 was disposed of during the year, earning
gain of Rs. 50,000.
(ii) On July 1, 2013, software was purchased at a cost of Rs. 1,000,000. It is company’s policy to
amortize all intangible assets over five-year period on straight-line basis and charge
amortization to cost of sales.
(iii) Current depreciation for the year of Rs. 2,000,000 has been charged to cost of sales.
(iv) Previously the company used to keep all its cash in current accounts, however, since
February 1, 2014, the company opened saving accounts yielding interest @ 8% per annum
receivable after every six months. (The interest accrued on investment is included in
advances, deposits and prepayments).
(v) On July 1, 2013, the company issued one right share for 5 previously held share at a
premium of 30% of the par value and utilized the proceeds to pay of all of the long-term and
short-term loans on July 31, 2013. Interest for the month of July 2013, when both loans
were outstanding and some other bank charges are included in financial charges.
(vi) Retained earnings in statement of financial position are after payment of dividend during
the year out of un-appropriate profits of the company.
Required:
Prepare Statement of Cash Flows for the year ended June 30, 2014, including reconciliation of cash and
cash equivalents in accordance with IAS 7 using ‘indirect method’. (Marks 20)
Additional information:
(a) The carrying value of property, plant and equipment are as follows:
Rs. ‘000’
2014 2013
Land 12,000 10,000
Building 38,000 40,000
Machinery - New 16,000 -
Machinery - Old 8,000 10,000
Office equipment 4,250 5,000
Furniture and fixture 3,200 4,000
Vehicles for Executive Management 1,800 2,000
Staff bus - 1,000
Total carrying amount 83,250 72,000
(b) Land has been revalued during the year while staff bus was sold for Rs. 1,200,000. Depreciation
and impairment on building and machines are charged to cost of sales while deprecation on
other assets is charged to administrative expenses.
(c) The yield on saving accounts is 8% per annum and the accounts were opened in a bank on July 1,
2013.
(d) On July 1, 2013 the company issued two (02) right shares for every five (05) shares held by its
existing shareholders at a premium of 20% of the par value.
(e) The company paid all long term and short term loans on January 31, 2014. Interest on loans is
included in financial charges. However, no interest is outstanding on June 2014.
Required:
Prepare a cash flow statement using indirect method for the year ended June 30, 2014 including
reconciliation of cash and cash equivalents in accordance with IAS 7. (Marks 20)
Required:
Prepare Statement of Cash flow using indirect method of Tehraz Company for the year ended June 30,
2015. (Marks 25)
Rs. '000'
Net profit before interest and tax 2,520
Finance costs (50)
Net profit before tax 2,470
Taxation (660)
Profit for the year 1,810
Transfers to general reserves (750)
Dividend (900)
Retained profit for the year 160
Retained profit brought down 720
Retained profit carried down 880
Additional information:
During the year ended on December 31, 2015 following assets were disposed of:
Plant and
600,000 475,000 110,000 ? ?
machinery
Required:
Calculate the net cash flow from operating activities using the direct method for the year ended
December 31, 2016. (Marks 14)
2005 2006
Cash in hand 200,000 300,000
Debtors - net 450,000 500,000
Stocks 400,000 650,000
Prepaid expenses 100,000 50,000
Fixed assets 1,150,000 1,650,000
Allowance for depreciation (75,000) (175,000)
2,225,000 2,975,000
The comparative balance sheets of Mr. Moosani show the following information:
Amount in Rupees
December 31
2008 2007
Cash 5,200 41,400
Accounts receivable 31,700 21,500
Inventory 25,000 19,400
Investments - 16,900
Furniture 80,000 64,000
Equipment 86,000 43,000
Total 227,900 206,200
The balance sheets of Sakhawat Hussain as at December 31, 2009 and 2008 are as follows:
2005 2006
Rupees
Current assets 4,750,000 2,850,000
Investments 2,600,000 2,500,000
Fixed assets 9,750,000 9,600,000
Accumulated depreciation (2,950,000) (2,450,000)
14,150,000 12,500,000
Required:
Prepare a statement of cash flow for the year ended December 31, 2009. (Marks 11)
Q.5 A shopkeeper made a net profit of Rs. 256,800 for the year ended June 30, 2008 after
charging depreciation of Rs. 17,500 and loss on disposal of furniture of Rs. 6,800. The sale
proceeds of the furniture were Rs. 12,000.
During the year, the net book value of fixed assets decreased by Rs. 7,400; debtors
increased by Rs. 11,700; stocks decreased by Rs. 21,600 and creditors increased by
Rs. 8,900. A long-term loan of Rs. 75,000 was repaid during the year and the shopkeeper
withdrew Rs. 120,000 for his own use.
Required:
Prepare the cash flow statement for the year ended June 30, 2008. (07)
2010 2009
Rupees
Cash 145,000 32,000
Accounts receivable 280,000 104,000
Long-term investments 220,000 170,000
Inventory 424,000 200,000
Prepaid insurance 24,000 36,000
Office supplies 14,000 7,000
Land 1,810,000 2,500,000
Building 2,800,000 2,300,000
Accumulated depreciation (890,000) (720,000)
Equipment 1,200,000 1,150,000
Accumulated depreciation (380,000) (350,000)
Total assets 5,647,000 5,429,000
2010
Rupees
Sales revenue 9,280,000
Cost of goods sold (6,199,000)
Gross margin 3,081,000
Operating expenses
Selling expenses 634,000
Administrative expenses 1,348,000
Depreciation expenses 230,000
2,212,000
Income from operations 869,000
Other revenues/expenses
Gain on sale of land 64,000
Gain on sale of long term investment 32,000
Loss on sale of equipment (15,000)
81,000
Net income 950,000
Drawings 568,000
Profit and loss account 382,000
Notes :
(a) Part of the long term loan amounting to Rs. 100,000 was paid by Mr. Junaid from his
personal account.
(b) Long term investments costing Rs. 100,000 were sold during the year.
(c) Depreciation charged during the year on equipment amounted to Rs. 60,000.
Equipment having a book value of Rs. 75,000 was sold during the year.
Required:
Prepare a cash flow statement for the year ended December 31, 2010. (14
marks)
Rupees
Profit during the year ended 31 August 2011 3,161,000
Mr. Amin’s withdrawals during the year 3,120,000
Accumulated depreciation on fixed assets – 31 August 2010 5,605,000
Accumulated depreciation on fixed assets – 31 August 2011 7,470,000
Provision for bad debts – 31 August 2010 385,000
Provision for bad debts – 31 August 2011 484,000
During the year fixed assets costing Rs. 1,500,000 with a book value of Rs. 867,000
were sold for Rs. 1,284,000.
Required:
Prepare a cash flow statement for the year ended 31 August 2011. Show necessary workings.
(13
marks)
Rupees
Sales 2,345,000
Cost of goods manufactured and sold (1,624,000)
Gross profit 721,000
Selling, general and administrative expenses (509,000)
Net income before income tax 212,000
Income tax (90,000)
Net income 122,000
Net changes in working capital items for the year ended 30 June 2013 were as follows:
Net changes
Dr. Cr.
Cash 32,000
Trade receivables (net) 74,000
Inventories 105,000
Prepaid expenses (selling and general) 6,000
Accrued expenses 15,000
Income tax payable 28,000
Trade payables 90,000
Required:
Prepare a cash flow statement for the year ended 30 June 2013. (07)
Settlement of the insurance claim pertained to an accident of a new car costing Rs. 1.8
million and having a depreciation charge of Rs. 0.25 million for the period in use.
Required:
Prepare a statement of cash flow for the year ended 31 December 2013.
Additional information:
(i) Profit before tax and income tax expenses for the year amounted to Rs. 275
million and Rs. 13 million respectively.
(ii) Balances as at 31 December 2013 were as under:
Rs. in million
Stock 703
Account receivables – net of provision 418
Cash and bank 243
Trade payables 150
Income tax payable 80
Long term deposit 70
The company follows a policy of maintaining provision for bad debts equal to
5% of account receivables.
(iii) The bank loan was obtained on 1 January 2014 and carries interest @ 9% per
annum.
(iv) XYZ uses straight line method for depreciation. Rates of depreciation are as
under:
Leasehold land 2%
Building 5%
Machinery 10%
Required:
Prepare a statement of cash flow as at 31 December 2014. (20)
Additional information:
(i) During the year, movements in property, plant and equipment include:
Depreciation amounting to Rs. 5,280,000.
Machinery having a carrying amount of Rs. 2,481,000 was sold for Rs. 3,440,000.
Factory building was revalued from a carrying amount of Rs. 5,963,000 to
Rs. 8,000,000.
An office building which had previously been revalued, was sold at its carrying
amount of Rs. 2,599,000.
(ii) The owner of QE withdrew Rs. 300,000 per month. The amounts were debited to
unappropriated profit.
(iii) Trade debts written off during the year amounted to Rs. 200,000. The provision for
bad debts as at 31 December 2015 was Rs. 400,000 (2014: Rs. 550,000)
(iv) The interest on bank loan is payable on 30th June every year. The bank loan was
received on 1 November 2015. Interest for two months has been accrued and included
in trade and other payables.
(v) Other income includes investment income of Rs. 398,000. As at 31 December 2015,
trade and other receivables included investment income receivable amounting to Rs.
96,000 (2014: Rs. 80,000).
Required:
Prepare a statement of cash flows for Quality Enterprises for the year ended
31 December 2015, using the indirect method. (18)
Additional information:
(i) Details of gain on sale of fixed assets are as follows:
Rupees
Gain on sale of freehold land 168,960
Loss on disposal of equipment due to fire (70,000)
98,960
The loss on disposal of equipment represents the WDV of the equipment. The
amount of insurance claim received, amounting to Rs. 30,000 was erroneously
credited to accumulated depreciation.
(ii) Repairs to building amounting to Rs. 50,000 were erroneously debited to building
account on 31 December 2016.
(iii) Transfers from capital work in progress to building amounted to Rs. 1,200,000.
(iv) The owner withdrew Rs. 150,000 per month.
Required:
Prepare statement of cash flows for the year ended 31 December 2016, in accordance with
IAS – 7 using indirect method. (12)