a58 Less Increase in Current Assets: Debtors (4,40,000) Prepaid Expenses (30,000) Decrease in Current Liabilities: Creditors (60,000) Expenses Outstanding (60,000) Net Cash from Operating Activities 19,60,000 Cash Flows from Investing Activities Payment for Purchase of Plant & Machinery (15,00,0002,00,000) (13,40,000) Cash outflow from Investing Activities (13,40,000) Cash Flows from Financing Activities Bank Loan Raised 1,50,000 Issue of Debentures 9,00,000 Payment of Dividend (10,50,000) Cash flows from Financing Activities Net Increase in cash and Cash equivalents during the year 6,20,000 Adf: Opeaning balance of cash and cash equivalents 27,00,000 Cash balance as on 30-6-2010 33,20,000 *Alternatively, provision for doubtful debts created (Rs. 40,000) + Rs. 2,30,000 (Bad Debts) may be added. In that case, increase in debtors (including bad debts written oft) Rs. 6,70,000 (Rs. 4,40,000 + Rs. 2,30,000) is subtracted. However, net effect will remain same. It is only a matter of presentation. Adjustment for interest on bank loan is ignored as rate of interest is not given. Illustration 17. From the following balance sheets of X Ltd. and additional information, prepare statement of changes in financial position (working capital basis) Liabilities Previous Current Assets Previous Current Year Year Year Year Share capital 2.50,000 3,50,000 Goodwill 60,000 50,000 Reserves 1,30,000) 1,65,000 Fixed Assets 2,90,000 3,95,00) Porposed Dividend 20,000 35,000 Current Assets 1,90,000 2,85,000 Provision for tax 50,000 60,000 Current Liability 90,000 1,20,000 5,40,000 7,30,000 5,40,000 7,30,000 Additional Information: 6) Depreciation on fixed assets provided during the year Rs. 30,000 Net profit during the year Rs. 80,000; Income-tax paid Rs. 50,660; Final dividend paid Rs. 20,000; Interim dividend was also paid. (L) Fixed asset costing Rs. 61,000 (accumulated depreciation Rs. 35,000) sold for Rs. 30,000 Yl) Fixed asset costing Rs. 50,0XX) was purchased by issue of Share Capital