TS Grewal 2021 for Class 12
Commerce Accountancy
Chapter 5 - Cash Flow
Statement
Page No 5.93:
Question 1:
Identify the transactions as belonging to (i) Operating Activities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash and Cash Equivalents:
|
(a)
Cash Sale of Goods |
(b)
Cash Received against Revenue from Services rendered |
|
(c)
Cash Purchase of Goods |
(d)
Cash Paid against Services Taken |
|
(e)
Patents Purchased |
(f)
Marketable Securities |
|
(g)
Bank Overdraft |
(h)
Proceeds from Issue of Debentures |
|
(i)
Purchase of Shares |
(j)
Repayment of Long-term Loan |
|
(k)
Commission Received |
(l)
Redemption of Debentures |
|
(m)
Interest on Debentures |
(n)
Interest on Investments |
|
(o)
Income Tax Paid |
(p)
Income Tax Paid on Gain on Sale of Asset |
|
(q) Cash
Received from Debtors |
(r)
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 |
|
|
|
Page No 5.93:
Question 2:
Classify the following transactions as Operating Activities for a financial company and a non-financial company:
|
(a)
Purchase of Shares on a Stock Exchange. |
(b)
Dividend received on Shares. |
|
(c)
Dividend paid on Shares. |
(d)
Loans given. |
|
(e)
Loans taken. |
(f)
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.
Page No 5.93:
Question 3:
State which of the
following would result in inflow/outflow or no flow of Cash and Cash
Equivalents:
(a) Sale of Fixed Assets, Book Value ` 1,00,000 at a profit of `10,000.
(b) Sale of goods against cash.
(c) Purchase of machinery for cash.
(d) Purchase of Land and Building for `10,00,000. Consideration paid by issue
of debentures.
(e) Issued fully paid Bonus Shares.
(f) Cash withdrawn from bank.
(g) Payment of Interim 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 |
Page No 5.93:
Question 4:
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:
(a) Acquired machinery for `2,50,000 paying 20%
by cheque and executing a bond for the balance payable.
(b) Paid `2,50,000 to acquire
shares in Informa Tech Ltd. and received a dividend of `50,000 after acquisition.
(c) Sold machinery of original cost of `2,00,000 with an accumulated
depreciation of `1,60,000 for `60,000.
Answer:
(a) Investing
Activity: 50,000
(b) Investing Activity: 2,00,000
(c) Investing Activity: 60,000