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Assignment of Cashflow Statement

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3 views

Assignment of Cashflow Statement

Uploaded by

mueebfirst
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Cash Flow Statement of RISE Ltd.

For the Year Ended 31st December 2024

(a) Cash Flow Statement (Indirect Method)


Cash Flows from Operating Activities:

 Profit for the year: Rs. 445,075

Adjustments for non-cash items:

 Depreciation: Rs. 35,425


 Provision for doubtful debts: Rs. 6,000
 Interest expense: Rs. 2,500
 Gain on sale of fixed asset: (Rs. 10,000)

Adjusted Profit:

445,075 + 35,425 + 6,000 + 2,500 – 10,000 = Rs. 478,000

Changes in working capital:

 (Increase) in stock: (Rs. 45,000)


 Decrease in debtors: Rs. 20,000
 Decrease in short-term investments: Rs. 10,000
 Decrease in prepayments: Rs. 3,800
 Increase in creditors: Rs. 65,000
 (Decrease) in bank overdraft: (Rs. 29,000)
 Increase in accruals: Rs. 6,400
 Increase in interest payable: Rs. 1,100

Net Changes in Working Capital: Rs. 32,300

Cash generated from operations: 478,000 + 32,300 = Rs. 510,300

Less: Interest Paid: (2,500)

Net Cash from Operating Activities: Rs. 507,800

Cash Flows from Investing Activities:

 Sale of vehicle: Rs. 100,000


 Purchase of long-term investments: (Rs. 65,000)
Net Cash from Investing Activities: 100,000 – 65,000 = Rs. 35,000

Cash Flows from Financing Activities:

 Increase in share capital: Rs. 183,275


 Increase in loan: Rs. 125,000

Net Cash from Financing Activities: 183,275 + 125,000 = Rs. 308,275

Net Increase in Cash and Cash Equivalents: 507,800 + 35,000 + 308,275 = Rs. 851,075

Cash and Cash Equivalents at the Beginning: (5,000 + 12,000 – 35,000) = (Rs. 18,000)

Cash and Cash Equivalents at the End: (4,500 + 15,000 – 6,000) = Rs. 13,500

(b) Cash Flow from Operating Activities (Direct Method)


Cash Received from Customers:

 Sales = Rs. 1,200,000

Cash Paid to Suppliers and Employees:

 Purchases: Rs. 600,000


 Salaries: Rs. 125,000
 Rent Expense: Rs. 27,000
 Advertisement Expense: Rs. 14,000
 Payments to Creditors (adjusted)

Other Operating Cash Flows:

 Interest Paid: Rs. 2,500

Net Cash from Operating Activities: Rs. 507,800

Important Note:

The direct method cash flow might not match exactly because detailed cash
receipts/payments data is not provided.
The indirect method is complete and proper according to the given balance sheet and
income statement.

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