Cash Flow Statement Example
The manager of D company wanted to calculate the cash flow of the company for the financial
year 31st March 2014- 1st April 2015. Due to a computer glitch the manager lost some data
related to the recorded transactions. However he was confident that he was able to retrieve all
the data that was necessary to prepare the cash flow statement for D company. The following
information pertaining to the company’s business was recovered.
1. The profit after tax (PAT) of the company was ‘400,000.
2. Provision for taxes for the current year was ’60,000 and Advance Tax paid amounted to
’80,000. Assessment for the financial year 2012-13 was completed in the current year.
Provision for tax for 2012-13 was ‘40000; advance tax paid for 2102-13 was ‘55,000. The
assessed tax for 2012-13 was ‘50,000.
3. Dividend declared and paid amounted to ’35,000. Dividend received amounted to
’45,000. Interest expense for the year was ’15,000
4. On July 1st 2014, the company purchased a new machine worth ‘300,000 with a useful
life of 15 years. On April 1st 2014, the company acquired some land for ‘200,000. The
total depreciation expense for the current year included in the calculation of PAT was
‘70,000.
5. On July 1st a piece of equipment which cost ‘150,000 and had a total accumulated
depreciation of ‘15,000 was sold for ‘140,000.
6. Investment in common stock of another company worth ’35,000 was sold for ’28,000.
7. During the year company recorded credit sales worth ‘220,000. Cash collected from our
customers amounted to ‘180,000. The opening balance of Accounts Receivables was
80,000.
8. Actual bad debts written off during the year were ‘7000. Bad debts recovered during the
year were ‘2000. Opening Balance of Allowance for Doubtful Debt (ADD) account was
‘8000. For all the years (current and past) the company has a policy of creating ADD at
the rate of 10% of closing balance of Accounts Receivables.
9. The company only made credit purchases (cash purchases were zero). Opening balance
of inventory was ’20,000, purchases amounted to ‘120,000 there were no returns, and
inventory used in the business amounted to ‘110,000.
10. Accounts Payables had an opening balance of ’60,000. No discount was received from
our suppliers and total cash paid to our suppliers amounted to ‘100,000.
11. 1000 Shares with a face value of 10 and market value of 20 were issued during the year.
12. Loans worth ‘15,000 were repaid during the year. Additionally some non-interest
bearing bonds worth ’35,000 were issued.
Based on the above information prepare the cash flow statement for D company.