Ms4 Mba 2011

Following are the balance sheets of a limited company as on 31st December, 2009 and 2010. Liabilities 2009 Rs. Share Capital Reserves P. & L. A/c Bank Loan (Long-term) Creditors Bills Payable 54.000 13,000 8,600 25,000 28,000 8,000 2010 Rs. 74,000 15,500 8,800 24,000 8,500 Goodwill Buildings Plant Stock Debtors Cash Bank 1,36,600 1,30,800 Assets 2009 Rs. 3,000 50,950 35,000 25,500 22,000 150 1,36,600 2010 Rs. 2,520 48,000 43,000 18,800 16,200 180 2,100 1,30,8 00

1.

Taking into account the following additional information, you are required to prepare funds flow statement and statement of change in working capital. a) Dividend paid was Rs. 6,000. b) Rs. 3,600 was written off as depreciation on plant and Rs. 2,950 on buildings. c) Profit on sale of plant was Rs. 3,000.
1.

Solution : Statement of Changes in Working Capital ==================================== Effect on WC PY CY Increase Decrease Current Assets Stock 25,500 18,800 6,700 Debtors 22,000 16,200 5,800 Cash 150 180 30 Bank 2,100 2,100 Total 47,650 37,280 2,130 12,500

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Current Liabilities Creditors 28,000 24,000 4,000 Bills Payable 8,000 8,500 Total 36,000 32,500 4,000 Net WC 11,650 4,780 Decrease in WC 6,870 11,650 11,650 Fund Flow Statement Sources of Fund Fund from Operation Share Capital Decrease in WC Total Application of Fund Payment of dividends Repayment of Bank Loan Net Purchase of plant Total
1Funds

500 500

12,7301 20,000 6,870 39,600

6,000 25,000 8,6002 39,600

from Operation Net Profit for 2010 Add : Transfer to Reserve Goodwill Written off Dividends Depreciation Less: Gain on sale of plant

200 2,500 480 6,000 6,550 15,730 3,000 12,730
2Plant

Beginning Balance Gain on sale Bank (Net Purchase) Balancing Figure

35,000 3,000 8,600 46,600

Depreciation 3,600 Ending Balance 43,000

46,600

2.

Two manufacturing companies which have the following operating details decide to merge:

Particulars

Company No. 1

Company No. 2... [continues]

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