Balance sheet and income statement of Tumbi Metal Works Ltd. for the year ended December 31, 2015 is given below:

Tumbi Metal Works Ltd.

Balance Sheet

As of December 31, 2015

31 Dec 201531 Dec 2014

Current Assets:

Cash and cash equivalentRs. 614,000Rs. 130,000

Marketable Securities56,000106,000

Notes receivable18,00021,000

Accounts receivable120,000135,000

Inventory165,000150,000

Prepaid expenses3,0005,000

Accrued interest (receivable)4,0003,500

Total current assets980,000550,000

Fixed Assets:

Plant and machinery (net of depreciation)875,000750,000

Building400,000400,000

Total fixed assets1,275,0001,150,000

Total Assets2,255,0001,700,500

Current liabilities:

Accounts payable190,000185,000

Notes payable 400,000-0-

Interest payable 25,00035,000

Income tax payable 20,00015,000

Other expenses Payable6,0004,500

Total Current liabilities641,000239,500

Long Term Liabilities:

Bonds payable700,000 600,000

Total Liabilities1,341,000 839,500

Shareholders' equity:

Issued and paid up Capital500,000500,000

Additional paid up capital200,000200,000

Retained earnings214,000 161,000

Total shareholders' equity914,000 861,000

Total liabilities and share holders' equity2,255,0001,700,500

Tumbi Metal Works Ltd.

Income Statement

For the year ended December 31, 2015

Net salesRs. 1,800,000

Interest earned35,000

Dividend revenue50,000

Gain on sale of marketable securities15,000

Total revenue1,900,000

Cost. Expenses and Losses

Cost of goods sold800,000

Operating expenses (including depreciation of Rs. 75,000520,000

Interest expense80,000

Income tax expense57,000

Loss on sale of plant40,000

Total1,497,000

Net profit for the year403,000Page 3 of 4

Additional Information:

Operating Activities:

1.Account receivable decreased by Rs. 15,000

2.Interest receivable increased by Rs. 500; and dividends are received in cash.

3.Inventory increased by Rs. 15,000; and accounts payable increased by Rs. 5,000.

4.Prepaid expenses decreased by Rs. 2,000; and other expenses payable increased by Rs. 1,500

5.Interest payable decreased by Rs. 10,000 and income tax expense payable increased by Rs. 5,000.

Investment Activities:

6.Collection on notes receivable Rs. 3,000

7.Marketable securities costing Rs. 50,000 were sold for Rs. 65,000

8.Plant and equipment costing Rs. 300,000 was sold for Rs. 260,000

9.New plant was purchased for Rs. 500,000, signed note payable for Rs.400,00 and balance paid in cash

Financing Activities:

10.Issued 20 years bonds payable for Rs. 100,000

11.Retained Earnings:

Opening balance 1-1-2015Rs. 161,000

Net profit for the year403,000

Cash dividends paid(350,000)

Closing balance as on 31-12-2015214,000

Required:

Using indirect method, prepare Cash Flow of Tumbi Metal Works Ltd for the year ended 31^st December 2015. Classify it in -

(1)Operating Activities

(2)Investment Activities, and

(3)Financing Activities