1.

From the following balance sheets, prepare Funds Flow Statement.Liabilities20142015Assets20142015Share capital 2,00,0002,50,000Cash30,00047,000Creditors70,00045,000Debtors1,20,0001,15,000Retained Earnings10,00023,000Stock80,00090,000Land50,00066,0002,80,0003,18,0002,80,0003,18,000

Answer»

   Fund Flow Statement

Source of fundsAmount (Rs.)Application of fundAmount (Rs.)
Issue of shares50,000Purchase of Land16,000
Fund from operation13,000Increase in working capital47,000
63,00063,000

Workings: 

(i) Statement of changes in working capital

20142015IncreaseDecrease
Current Assets:
Cash30,00047,00017,000
Debtors1,20,0001,15,0005,000
Stock80,00090,00010,000
Current liabilities:
Creditors 70,000 45,00025,000
52,0005,000

Net Increase in Working Capital: Rs. 47,000

(ii) Calculation of Funds From Operations 

Profit and Loss Adjustment Account

ParticularsAmount (Rs.) ParticularsAmount (Rs.)
To balance c/d23,000By Balance b/d10,000
By Funds From Operations (balancing figure)13,000
23,00023,000


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