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Following are the balance sheets of a limited company as on 31st December, 2016 and 2017.

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Liabilites
2016 (₹)
2017 (₹)
Asset
2016 (₹)
2017 (₹)
Share capital
60000
75000
Furniture
36000
43000
P&L A/C
8600
9000
Building
50950
48000
Creditors
22000
18000
Stock
25500
20000
Bills Payable
8000
9000
Debtors
21500
15000
Bank Loan(long term)
22000
-
Goodwill
2500
1520
Reserve
16000
19800
Bank
-
3100



Cash
150
180

1,36,600
1,30,800

1,36,600
1,30,800

Taking into account the following additional information, you are required to prepare funds flow statement and statement of changes in working capital.
(a) Rs. 8,000 was paid as dividend during the year.
(b) Depreciation on Furniture was charged Rs. 4000 and on Building, it was Rs.3000.
(30 Marks)




SOLUTION             
                      
Funds flow Statement of Limited company
(for the year ending 31-03-17)

(A)                SOURCES
AMOUNT                                         ( ₹)
ISSUE OF SHARES (75000-60000)
15000
FUNDS FROM OPERATION
(WORKING NOTE  1)
20180


       TOTAL
35180


(B)     APPLICATION OF FUNDS
AMOUNT                                     ( ₹)
REPAYMENT OF LOAN
22000
PURCHASE OF FURNITURE
(WORKING NOTE 2)
11000
PAYMENT OF DIVIDEND
8000
PURCHASE OF BUILDING
(WORKING NOTE 3)
50


   TOTAL
41050

NET DECREASE IN WORKING CAPITAL
   (A-B)

5870

                                                                                                                                                                                                                               

                                SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE PERIOD ENDING
PARTICULARS
PREVIOUS YEAR AS ON
CLOSING YEAR AS
ON
EFFECTS ON WORKING CAPITAL



INCREASE (+)
DECREASE(-)
CURRENT ASSETS




CASH
150
180
30

BANK
-
3100
3100

DEBTOR
21500
15000

6500
STOCKS
25500
20000

5500
TOTAL CURRENT ASSETS
47150
38280







CURRENT LIABILITIES




CREDITOR
22000
18000
4000

BILLS PAYABLE
8000
9000

1000
TOTAL CURRENT LIABILITIES
30000
27000


NET DECREASE IN WORKING CAPITAL


5870

TOTAL


13000
13000
                                                                                                                               
                                                               
                                                                                WORKING NOTES

STATEMENTS SHOWING FUNDS FROM OPERATION

FUNDS FROM OPERATION

AMOUNT ()

PROFIT&LOSS AS ON 31-03-17

9000
ADD:


DEPRECIATION ON FURNITURE
4000

DEPRECAITION ON BUILDING
3000

WRITINGOFF OF GOODWILL
980

T/F TO RESERVE
3800

PAYMENT OF DIVIDEND
8000



19780


28780(9000+19780)
LESS: P&LOSS AS ON 31-03-16

8600
FUNDS FROM OPERATION

20180(28780-8600)




                                                                FURNITURE A/C
 
PARTICULAR
AMOUNT (₹)
PARTICULAR
AMOUNT (₹)
TO BALANCE B/D
36000
BY DEPRECIATION
4000

TO PURCHASE (B/F)
11000
BY BALANCE C/D

43000


47000

47000

                                                 BUILDING A/C
  
PARTICULAR
AMOUNT (₹)
PARTICULAR
AMOUNT (₹)
TO BALANCE B/D

50950
BY DEPRECIATION
3000
TO PURCHASE(B/F)
50
BY BALANCE C/D
48000


51000


51000

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