Ch. 9 Cash Flows: PYQ Decoder

June 2026Q. 2(c)5 marksSyllabus 2022

(c)The following balances are extracted from XYZ Ltd. at the end of the year 2024-25 :

Additional Information :

i.10% dividend was paid in cash,

ii.New machinery for ₹ 15,000 was purchased and old machinery costing

iii.₹ 6,000 was sold for ₹ 2,000; accumulated depreciation was ₹ 3,000.

iv.₹ 10,000, 8% debentures were redeemed by purchase from open market @ ₹ 96 for a debenture of ₹ 100.

v.An investment of ₹ 18,000 was sold at a book value.

You are required to prepare a cash flow statement for the year ended 31.03.2025 as per AS 3 (revised) using the indirect method.

December 2025Q. 4(b)5 marksSyllabus 2022

(b)On the basis of the following information provided by X Ltd. Prepare a Cash Flow Statement for the year ended on 31st March 2025 :
(i)X Ltd. sold all the goods for cash only and purchased the goods in credit from suppliers only.
(ii)The company has made a total purchase of INR 77,00,000.
(iii)The company paid INR 45,00,000 as wages and INR 9,00,000 as office expenses during the year.
(iv)Balance of Suppliers accounts on 31.03.2024 were higher than the balance on 31.03.2025 by INR 3,00,000.
(v)Tax paid by the company amounts to INR 8,00,000 while provision for taxation was INR 7,00,000.
(vi)The company repaid bank loan of INR 17,50,000 which included interest of INR 1,50,000.
(vii)Dividend paid during the year INR 5,00,000 (including dividend distribution tax).
(viii)X Ltd. sold investments of INR 60,00,000 at a profit of INR 4,00,000.
(ix)Furniture purchased during the year INR 20,00,000.
(x)Cash and Cash Equivalents as on 31.03.2024 was INR 10,00,000.
(xi)Cash and Cash Equivalents as on 31.03.2025 was INR 49,50,000.

June 2025Q. 1(a)7 marksSyllabus 2022

Show the facts common to all parts of Q. 1

Aashna is a Mechanical Engineer from a premier institute based in Kolkata. After working for a decade in the engineering industry, Aashna completes a management development programme from a top-grade Business School. Subsequently, Aashna along with her three colleagues sets up a venture capital fund - GKJ & Co. The aim is to invest in companies that manufacture import substitutes. There is an impetus from the Government to manufacture in India to meet domestic demand and for the world and hence it is felt that any investment made in the manufacturing industry is likely to grow at an above average rate.

GKJ & Co. has raised an initial amount of ₹ 80 crore from investors and is scouting for initial deployment opportunities. One such opportunity is investments in Royden & Co. Royden & Co. is a manufacturer of equipment and tools which are used in dental clinics. This equipment is essentially an import substitute and has potential to be exported as well.

The Balance Sheet of Royden & Co. as on the recent financial year end is given below :

I. Equity and Liabilities	Beginning of financial year	Ending of financial year
	( ₹ Lakhs)	( ₹ Lakhs)
Share Capital	1,400	1,600
Share Premium	180	220
Retained Earnings	476	616
7% Mortgage Loans	-	400
Creditors	138	120
Outstanding Salaries	40	28
Provision for taxation	20	28
Total	2,254	3,012
II. Assets
Plant & Machinery	1,240	1,320
Accumulated depreciation on plant and machinery	(740)	(524)
Building	1,900	2,320
I. Equity and Liabilities	Beginning of financial year	Ending of financial year
	( ₹ Lakhs)	( ₹ Lakhs)
Accumulated depreciation on building	(860)	(900)
Land	200	240
Stock	204	192
Debtors	172	152
Prepaid Expenses	14	16
Cash & Bank	124	196
Total	2,254	3,012

The following additional details are hereunder :

(i)Plant costing ₹ 320 lakhs (accumulated depreciation ₹ 296 lakhs) was sold during the year for ₹ 24 lakhs

(ii)Building was acquired during the year at cost of ₹ 420 lakhs. In addition to cash payment of ₹ 20 lakhs mortgage of ₹ 400 lakhs was raised for balance.

(iii)Dividend of ₹ 160 lakhs was paid during the year.

(iv)A sum of ₹ 278 lakhs was transferred to Provision for tax account.

Royden & Co. wants to setup a plant to manufacture advanced dentistry equipment. The said equipment is imported from USA. The Indian Government is giving benefits in terms of tax holidays for such types of business. It is estimated that turnover of ₹ 800 lakhs could be generated at a profit in the first year of operations. The new business setup requires a significant investment. Royden & Co. have reached out to GKJ & Co. for the first round of funding. GKJ & Co. has requested Royden & Co. for some further information before investing. Royden & Co. is requested to prepare profitability projections under different scenarios. The scenarios are given below :

	Base Case (Rs. Lakhs)	Best Case	Worst Case
Revenues	800	Sales higher by	Sales decline by
		37.5%	25%
Variable Cost 60% of sales	480	56% of sales	65% of sales
Fixed Cost	80	60	100
Depreciation	100	100	100
Income Tax	Rs.40 lakhs	Same income tax	Same income tax
		rate as base case	rate as base case

(a)Prepare cash flow statement (indirect method) of Royden & Co. for the current financial year with the available details.

Cash Flow Statement (indirect method) of Royden & Co.

		Amount (₹ lakh)
A. Cash Flow from Operations
Net Profit for the year before dividend and provision for tax (W.N:1)		578
Depreciation on Plant (W.N:2)	80
Depreciation on Building (W.N:2)	40	120
		698
Changes in working capital
Decrease in stock	12
Decrease in Debtors	20
Increase in prepaid expenses	(2)	30
Decrease in creditors	(18)
Decrease in outstanding salaries	(12)	(30)
Cash flow from operations before tax payment		698
Less: Income Tax paid (W.N:1)		(270)
Cash flow from operations after income tax paid - I		428
B. Cash Flow from Investing
Purchase of Building (W.N:2)	(420)
Purchase of Plant & Machinery (W.N:2)	(400)
Purchase of Land	(40)
Sale of Plant	24
Net Cash Flow from Investing - II		(836)
C. Cash Flow from Financing
Mortgage Loan	400
Issue of Shares	200
Share premium	40
Dividend paid	(160)
Cash Flow from Financing - III		480
Change in Cash & cash equivalents (I+III-II)		72
Opening Balance of cash & cash equivalents		124
Closing Balance of cash & cash equivalents		196

Working Note- 1: Calculation of Net Profit after tax but before dividend and provision for tax.

Provision for Taxation A/c

Particulars	Amount (₹ lakh)	Particulars	Amount (₹ lakh)
To Bank (income tax paid) (Balancing figure)	270	By balance b/d	20
To balance c/d	28	By P&L A/c	278
	298		298
Retained Earnings A/c
Particulars	Amount (₹ lakh)	Particulars	Amount (₹ lakh)
To Dividend paid	160	By balance b/d	476
To balance c/f	616	By Profit (Balancing figure)	300
	776		776
Net profit for the year =			Provision for Tax Account (P&L account balance) + Profit for the year as

per retained earnings

= ₹ 278 lakh + ₹ 300 lakh = ₹ 578 Lakh

Working Note- 2: Depreciation

Plant and Machinery A/c

Particulars	Amount (₹ lakh)	Particulars	Amount (₹ lakh)
To balance b/f	1,240	By Bank A/c (sale of plant)	24
To Bank – purchase (Balancing figure)	400	By depreciation on plant sold	296
		By balance c/d	1,320
	1,640		1,640

Accumulated Depreciation on Plant and Machinery A/c

Particulars	Amount (₹ lakh)	Particulars	Amount (₹ lakh)
To depreciation on plant sold	296	By balance b/d	740
To balance c/d	524	By P&L A/c (depreciation for current year)	80
	820		820

Building A/c

Particulars	Amount (₹ lakh)	Particulars	Amount (₹ lakh)
To balance b/d	1,900
To Bank	420
		By balance c/d	2,320
	2,320		2,320

Accumulated Depreciation on Building A/c

Particulars	Amount (₹ lakh)	Particulars	Amount (₹ lakh)
		By balance c/d	860
To balance c/f	900	By P&L A/c (depreciation)	40
	900		900

Source⁠‌‌‌‌⁠: ICSI Guideline Answers, June 2025, Q. 1(a) (Syllabus 2022).

December 2024Q. 4 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Current Assets do not include ................

(A)Other Current Assets

(B)Deferred Tax Assets

(C)Current Investment

(D)Cash and Cash Equivalents

December 2024Q. 53 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash flows arising from transaction in a foreign currency should be recorded in an enterprise’s reporting currency by applying to the foreign currency amount, the exchange rate .........

(A)prevailing at the beginning of the financial year

(B)that is average rate

(C)prevailing at the end of the financial year

(D)prevailing at the date of the cash flow

December 2024Q. 54 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Net profit before working capital changes of N Ltd. is ₹ 3,52,000. The changes in the working capital during the year are as follows :

Particulars	Amount in ₹
Decrease in stock	2,68,800
Decrease in creditor	9,600
Increase in debtor	28,800
Increase in advances paid	1,920
Increase in outstanding exp.	38,400

Calculate, Cash generated from operation = ?

(A)₹ 5,62,080

(B)₹ 6,18,880

(C)₹ 1,47,720

(D)₹ 1,01,280

December 2024Q. 55 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash payments to and on behalf of employees is an example of cash flow from ..............

(A)Operating activity

(B)Investing activity

(C)Financing activity

(D)None of the above

December 2024Q. 56 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

The following information is available :

Particulars	Amount in ₹
Opening cash balance	10,000
Particulars	Amount in ₹
Closing cash balance	12,000
Decrease in Trade Receivable	5,000
Increase in Trade Payable	7,000
Sale of Fixed Assets	20,000
Issue of Pref. Shares	30,000
Purchase of Furniture	12,000
Redemption of Debenture	50,000
Net profit for the year	20,000

On the basis of the above information, calculate the amount of cash from operating activities.

(A)₹ 32,000

(B)₹ 30,000

(C)₹ 18,000

(D)₹ 22,000

December 2024Q. 57 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

On the basis of the Q. No. 56, calculate the amount of cash from investing activities.

(A)₹ 70,000

(B)₹ 8,000

(C)₹ –12,000

(D)₹ 20,000

December 2024Q. 58 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

On the basis of the Q. No. 56, calculate the amount of cash from financing activities.

(A)₹ 30,000

(B)₹ 20,000

(C)₹ –20,000

(D)₹ –50,000

December 2024Q. 59 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Investing activities refers to the activities pertaining to the acquisition and disposal of :

(A)Long-term Loans

(B)Current Liabilities

(C)Current Assets

(D)Long-term Assets

December 2024Q. 4(c)5 marksSyllabus 2022

( c )The Capital structure of Sangam Ltd. is given below :

Particulars	₹ (Crore)
Share Capital (divided in shares of 10/- each)	5,000
Secured Loans	4,000
Unsecured Loans	2,500

In the next year the company is undertaking an expansion project of ₹ 1,500/- crore.

The project is to be financed in the ratio of 40% infusion of fresh owner capital and 60% secured debt capital. No old debt is repaid during the year.

The equity capital will be raised at ₹ 15/- per share. The average interest rate of the debt (old + new) will be 13%.

The income tax rate is 25%.

Prepare a statement showing forecast cash flow from financing activities.

June 2024Q. 20 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Net profit for the year is ₹ 2,00,000. During the period, Trade Payable decreased by ₹ 10,000, inventory increased by ₹ 6,000 and Trade Receivables increased by ₹ 15,000. The amount of cash flow from operating activities using the indirect method will be :

(A)₹ 1,69,000

(B)₹ 1,75,000

(C)₹ 1,79,000

(D)₹ 1,84,000

June 2024Q. 49 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Sale of copyright is concerned with cash flow from ...................... .

(A)Operating activities

(B)Financing activities

(C)Investing activities

(D)Revenue activities

June 2024Q. 3(c)5 marksSyllabus 2022

(c)The summarized information of CBA Limited is given below :

Balance Sheet of CBA Ltd. on 1st April 2022 to 31st March, 2023

		Amount (in ₹)
	Particulars	1st April 2022	31st March, 2023
I.	Equities and Liabilities
	Equity Share Capital	9,00,000	10,50,000
	Share Premium	—	90,000
	General Reserve	1,35,000	1,95,000
	Profit and Loss Account	90,000	2,42,400
	10% debentures	—	2,10,000
	Sundry Creditors	2,55,000	2,72,100
	Provision for Taxation	67,500	1,21,500
	Proposed Dividend	90,000	1,05,000
	Total	15,37,500	22,86,000
II.	Assets
	Land and Building	6,90,000	11,70,000
	Plant and Machinery	2,56,200	4,20,000
	Furniture	16,500	19,500
	Stock	2,47,200	2,87,100
	Sundry Debtors	2,25,000	2,56,500
	Bank	1,02,600	1,32,900
		15,37,500	22,86,000

Depreciation during the year :	Amount (in ₹)
Land and Building	1,80,000
Plant and Machinery	1,50,000
Furniture	3,600

Debentures were issued on 1st October, 2022.

Prepare Cash Flow Statement of CBA Limited for the financial year ended 31st March, 2023.

December 2023Q. 41 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Using the following information find out the net cash flow from investing activities:

31.12.2021 (₹)		31.12.2022 (₹)
Building (WDV)	2,00,000	4,00,000

Building costing ₹ 50,000 on which ₹ 20,000 had accumulated depreciation was sold for ₹ 25,000. Depreciation charged on building for the year ended on 31.12.2022 was ₹ 30,000.

(A)₹ 2,00,000

(B)₹ 2,25,000

(C)₹ 2,35,000

(D)₹ 2,60,000

December 2023Q. 42 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Following information are given :

Particulars	2021 (₹)	2022 (₹)
Equity Share Capital	4,50,000	6,50,000
10% Debentures	3,00,000	1,50,000
Long term loan	.....	80,000
Securities Premium	60,000	75,000

If interest paid on debentures was ₹ 30,000, the net cash flow from financing activities is :

(A)₹ 85,000

(B)₹ 1,15,000

(C)₹ 1,40,000

(D)₹ 2,90,000

December 2023Q. 44 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

With the help of cash flow statements users can assess the reliability of .....................

(A)Net profit

(B)Net worth

(C)Value of assets

(D)Extent of liability

December 2023Q. 45 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash from operations is equal to :

(A)Net profit plus decrease in current assets

(B)Net profit plus decrease in current liabilities

(C)Net profit plus bonus shares issued

(D)Net profit minus right shares issued

December 2023Q. 59 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Which of the following is a disclosure requirement of AS 3 in a Cash Flow Statement ?

(A)Disclosure of the amount of cash and cash equivalents in specific situations

(B)Cash flows arising from changes in ownership interest in subsidiaries

(C)Investments in subsidiaries, associates and joint ventures

(D)Cash flows associated with extraordinary activities

December 2023Q. 4(c)5 marksSyllabus 2022

(c)From the following summary of bank account of X. Ltd., prepare Cash Flow Statement for the year ended 31st March, 2023 :

Summary of Bank Account for the year ended 31.3.2023

Particulars	Amount in		Particulars		Amount in
₹ in lakh					₹ in lakh
To Balance b/d	50			By Payments to Suppliers	2,000
To Issue of Equity Shares	300			By Purchase of Fixed Assets	200
To Receipts from				By Overhead Expenses	200
Customers	2,800			By Wages and Salaries	100
To Sales of Fixed Assets	100		By Income Tax		250
By Dividend					50
By Repayment of Bank Loan					300
By Balance c/d					150
Total	3,250	Total			3,250

Assume that the company does not have any cash and cash equivalents and there were NIL cash transaction.

June 2023Q. 41 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

If the sales are ₹ 50,00,000, operating expenses ₹ 38,50,000, Tax paid ₹ 3,58,800 and dividend paid ₹ 1,22,000. What will be Net Operating Profit After Tax ?

(A)₹ 11,50,000

(B)₹ 10,28,000

(C)₹ 6,69,200

(D)₹ 7,91,200

June 2023Q. 44 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

While preparing the Cash Flow Statement, adjustment for Proposed Dividend is :

(A)Add the previous year’s proposed divid end under net profit before tax and extraordinary items and deduct it under Financing Activity

(B)Add the current year’s proposed dividend under net profit before tax and extraordinary items and deduct the previous year’s proposed dividend under Financin g Activity

(C)Add the current year’s proposed dividend under Net Profit before Tax and Extraordinary Items and deduct the current year’s proposed dividend under Financing Activity

(D)Add the current year’s proposed dividend under net profit before tax and extraordinary items

June 2023Q. 45 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

While preparing the cash flow statement ‘Interest paid to debentureholders’ will be considered as a .................. .

(A)Operating Activity

(B)Investing Activity

(C)Financing Activity

(D)Investing and Financing Activity

June 2023Q. 47 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Profit during the year ₹ 2,20,000. During the year, there was an increase in stock by ₹ 72,000 and a decrease in creditors by ₹ 48,000. What is the amount of cash from operating activities?

(A)₹ 3,20,000

(B)₹ 2,24,000

(C)₹ 1,76,000

(D)₹ 1,00,000

June 2023Q. 48 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

ABC Limited purchased machinery for ₹ 50,00,000 and sold an old plant with a book value of ₹ 13,20,000 at a loss of ₹ 1,30,000. ABC Limited also received a dividend of ₹ 1,20,000 on invest ment in shares. The amount of inflow/outflow in investing activity will be:

(A)₹ 14, 40,000/₹ 50, 00,000

(B)₹ 13, 20,000/₹ 50, 00,000

(C)₹ 13, 10,000/₹ 50, 00,000

(D)₹ 13, 20,000/₹ 48, 70,000

December 2022Q. 22 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash Flow Statement, as a part of financial statements, helps in assessing the ................ of an enterprise.

(A)Liquidity

(B)Solvency

(C)Efficiency in Cash Management

(D)All of the above

December 2022Q. 43 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash equivalents are investments :

(A)Having significant risk of change in value

(B)Held for meeting long-term cash commitments

(C)Readily convertible into known amount of cash

(D)All of the above

December 2022Q. 44 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

The net income reported in the income statement of the year was ₹ 1,75,000 and depreciation on fixed assets for the year was ₹ 40,000. The balances of current assets and current liabilities are as follows:

Items		Opening Balance	Closing Balance
( ₹ )			( ₹ )
Inventories	2,00,000		1,80,000
Debtors	1,90,000		2,20,000
Cash	1,60,000		1,40,000
Prepaid Expenses	20,000		15,000
Accounts Payable	1,00,000		85,000

The cash flow from operating activities would be :

(A)₹ 2,00,000

(B)₹ 1,95,000

(C)₹ 2,10,000

(D)₹ 2,25,000

December 2022Q. 45 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

From the following information, find out the cash flow from Investing activities.
Furniture in the beginning of the year (net) ₹ 3,50,000
Furniture at the end of the year (net) ₹ 4,10,000
Furniture having book value of ₹ 25,000 was sold for ₹ 18,000
Depreciation charged on furniture during the year was ₹ 30,000
(A)₹ 60,000
(B)₹ 90,000
(C)₹ 97,000
(D)₹ 1,45,000

December 2022Q. 46 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

M Ltd. provides the following details :

Items	2020 (₹)	2021 (₹)
Share Capital	8,00,000	12,00,000
12% Debentures	4,00,000	3,00,000
Share premium	60,000	1,00,000
Int. on debentures paid	—	48,000
Dividend received	—	30,000

Cash flow from financing activities would be :

(A)₹ 3,22,000

(B)₹ 4,70,000

(C)₹ 3,70,000

(D)₹ 2,92,000

December 2022Q. 47 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

In the following situations, when there will be a flow of fund for the purpose of Fund Flow Statement ?

(A)If both the accounts involved are current accounts

(B)If both the account involved are non-current accounts

(C)If one account involved is a current account and other one is a non-current account

(D)All of the above

December 2022Q. 49 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

The balance in Plant & Machinery account at the beginning of the accounting year was ₹ 1,80,000 and at the end was ₹ 2,60,000. During the year, an old machinery which had cost of ₹ 12,000 (accumulated depreciation thereon ₹ 9,000) was sold for ₹ 8,000. The net/overall flow of fund from plant & machinery, if the current year depreciation was ₹ 22,000, is :

(A)Outflow ₹ 97,000

(B)Outflow ₹ 1,05,000

(C)Inflow ₹ 97,000

(D)Outflow ₹ 1,10,000

December 2022Q. 52 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

AS 3 shall not apply to small and medium company (SMC) if it is a :

(A)One Person Company

(B)Dormant Company

(C)Small Company

(D)All of the above

June 2022Q. 37 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Debenture interest paid is ₹ 1,20,000, Provision for taxation is ₹ 1,10,000, Preference share dividend paid is ₹ 80,000, Proposed dividend on equity shares is ₹ 1,80,000, then the Cash Flow from Financing Activities is :

(A)₹ 2,00,000

(B)₹ 2,60,000

(C)₹ 3,80,000

(D)₹ 4,90,000

June 2022Q. 39 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Z Ltd. had the investment of ₹ 34 lakh as on 31st March, 2020 and that of ₹ 40.50 lakh as on 31st March, 2021. During the year the company sold 30% of its original investments at a profit of ₹ 4.80 lakh. The Cash Inflow and Cash Outflow from the investment are :

(A)₹ 10.20 lakh and ₹ 16.70 lakh

(B)₹ 15 lakh and ₹ 16.70 lakh

(C)₹ 15 lakh and ₹ 21.50 lakh

(D)₹ 16.70 lakh and ₹ 15 lakh

June 2022Q. 40 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash inflow before working capital changes is ₹ 12,00,000, decrease in inventory is ₹ 1,50,000, increase in receivables position is ₹ 2,00,000 and increase in payables position is ₹ 1,75,000, then Cash Flow from Operating Activities is :

(A)₹ 10,75,000

(B)₹ 13,25,000

(C)₹ 13,75,000

(D)₹ 14,25,000

June 2022Q. 46 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

X Ltd. has a cash sales of ₹ 15,00,000. Cash expenses are ₹ 7,00,000 and depreciation ₹ 1,25,000. Cash from Operating Activities of the company is :

(A)₹ 5,75,000

(B)₹ 9,25,000

(C)₹ 6,75,000

(D)₹ 8,00,000

June 2022Q. 47 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

In case of financial enterprises, cash flows arise from interest paid should be classified as cash flow from :

(A)Operating Activities

(B)Investing Activities

(C)Financing Activities

(D)Cash Activities

December 2021Q. 37 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

The net profit after tax for the year was ₹ 30,00,000. Working capital increased during the year by ₹ 5,00,000. Depreciation for the year was ₹ 5,00,000 and tax expenses was ₹ 7,50,000. Amount paid towards income tax based on selfassessment and demand from tax department for earlier year was ₹ 10,00,000. Cash flow from operating activities is :

(A)₹ 47,50,000

(B)₹ 40,00,000

(C)₹ 37,50,000

(D)₹ 30,00,000

December 2021Q. 38 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Interest Payment by non-financial enterprises is classified as :

(A)Operating activity

(B)Investing activity

(C)Financing activity

(D)Operating as well as Financing activity

December 2021Q. 42 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

The land account was debited by ₹ 60,00,000 and credited by ₹ 25,00,000 during the current year. The income statement reported a profit on sale of land in the amount of ₹ 2,00,000. All transactions related to land account were cash transactions. These transactions would be shown in the statement of cash flow as :

(A)₹ 60,00,000 cash provided by investing activities, and ₹ 25,00,000 cash disbursed for investing activities.

(B)₹ 27,00,000 cash provided by investing activities, and ₹ 60,00,000 cash disbursed for investing activities.

(C)₹ 25,00,000 cash provided by investing activities, and ₹ 60,00,000 cash disbursed for investing activities.

(D)₹ 23,00,000 cash provided by investing activities, and ₹ 60,00,000 cash disbursed for investing activities.

June 2021Q. 1 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

For the purpose of Cash Flow Statement, ‘Cash Equivalents’ include :

(A)bank fixed deposit for 30 days

(B)money market instruments

(C)treasury bills

(D)All of the above

June 2021Q. 2 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

A Company has a Net Cash Sale of ₹ 6,00,000, Cash Expenses ₹ 2,80,000 and Depreciation ₹ 50,000. Cash from Operating Activity should be :

(A)₹ 1,60,000

(B)₹ 1,20,000

(C)₹ 2,40,000

(D)₹ 3,20,000

June 2021Q. 3 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash Inflow before working capital changes is ₹ 4,80,000, decrease in inventory is ₹ 60,000, increase in receivables position is ₹ 80,000 and increase in payables position is ₹ 70,000, then cash flow from operating activity is :

(A)₹ 5,50,000

(B)₹ 4,30,000

(C)₹ 5,70,000

(D)₹ 5,30,000

June 2021Q. 4 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Debentures interest paid is ₹ 80,000, Proposed dividend on equity shares is ₹ 1,50,000, Preference dividend paid is ₹ 1,20,000, Provision for tax is ₹ 90,000, then cash outflow from financing activity is :

(A)₹ 3,50,000

(B)₹ 4,40,000

(C)₹ 2,00,000

(D)₹ 2,80,000

June 2021Q. 7 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash flows arising from the purchase and sale of dealing or trading securities are classified as :

(A)Operating Activities

(B)Investing Activities

(C)Financing Activities

(D)Extraordinary Activities

December 2020Q. 9 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

On 31st March, 2019, X Ltd. has 8% fixed Deposit (Date of FD 1st March, 2019, maturing on 31st May, 2019) of ₹ 3,00,000. Interest is received on monthly basis. While preparing Cash Flow Statement as per AS-3 :

(A)₹ 2,000 (interest) will be added to net profit while calculating net cash inflow after tax from operating activities

(B)₹ 3,00,000 will be treated as cash outflow in investing activities

(C)Both (A) and (B)

(D)None of the above

December 2020Q. 20 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Which of the following is not a cash flow for a company?

(A)Dividends

(B)Proceeds from issuance of share capital

(C)Amortisation of preliminary expenses

(D)Interest payments

December 2020Q. 32 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Cash payments to and on behalf of employees is an example of.................

(A)Cash flow from operating activities

(B)Cash flow from investing activities

(C)Cash flow from financing activities

(D)None of the above

December 2020Q. 42 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

In case of a financial enterprise, Interest received on Debentures held as Investment is ..................

(A)Operating activity

(B)Investing activity

(C)Financing activity

(D)None of the above

December 2019Q. 40 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Pooja Ltd. had the investment of ₹ 68 lakh as on 31st March, 2018 and that of ₹ 81lakh as on 31st March, 2019. During the year the company had sold 30% of its original investment at a profit of ₹ 9,60,000. The cash inflow and outflow from investment will be :

(A)₹ 20.40 lakh and ₹ 33.40 lakh

(B)₹ 33.40 lakh and ₹ 30 lakh

(C)₹ 30 lakh and ₹ 43 lakh

(D)₹ 30 lakh and ₹ 33.40 lakh

December 2019Q. 42 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

In the case of financial enterprises, cash flows arises from interest paid should be classified as cash flow from :

(A)Operating Activities

(B)Investing Activities

(C)Financing Activities

(D)Either (B) or (C)

December 2019Q. 46 (CMA)1 markMCQCorporate and Management Accounting paper, Syllabus 2017

Following information were provided by a trading company to you :
₹
Net profit after tax for the year 2018-1918,35,000
During the year 2018-19
·Depreciation written off1,08,000
·Goodwill written off50,000
·Provision made for taxation5,50,000
·Income tax paid4,80,000
·Interest on Investment credited to Profit and
Loss Account25,000
·Interim dividend paid2,10,000
Cash flow from Operating Activities would be :
(A)₹ 22,73,000
(B)₹ 20,38,000
(C)₹ 17,23,000
(D)₹ 20,63,000

June 2019Q. 3(b) (CMA)5 marksCorporate and Management Accounting paper, Syllabus 2017

(b)Following balances are provided by Nakul Ltd. for the year ended on 31st March, 2018 and on 31st March, 2019 : Amount ( ₹ in lakh)

Particulars		31st March, 2018		31st March, 2019
Equity Share Capital	500		560
General Reserves	310		365
Surplus	165		222
8% Debentures	350		200
Goodwill	60		47
Land & Building	430		387
Plant & Machinery	300		330
Investment (Trading)	48		53
Trade Payables	105		122
Provision for tax	78		98
Outstanding Expenses	18		13
Inventories	165		153
Trade Receivables	171		206
Cash at Bank	52		63
Prepaid Expenses	7		5

Additional Information :

(1)During the year, an old machine costing ₹ 45 lakh was sold for ₹ 21 lakh. It's written down value was ₹ 29 lakh.

(2)Depreciation charged on plant and machinery @ 15% on the opening balance.

(3)There were no purchases or sales of land and building during the year.

(4)Provision for tax made during the year was ₹ 96 lakh.

(5)During the year, premium on redemption of debentures was written-off as ₹ 15 lakh. From the above mentioned information, you are required to prepare a Statement showing the Net Cash Flow from the Operating Activities.

December 2018Q. 3(b) (CMA)5 marksCorporate and Management Accounting paper, Syllabus 2017

(b)From the following information of Varsha Ltd., prepare a cash flow statement as per AS-03 :
Equity & LiabilitiesPreviousCurrentAssetsPreviousCurrent
Year ( ₹ )Year ( ₹ )Year ( ₹ )Year ( ₹ )
Share Capital5,00,0007,00,000 Goodwill—50,000
General Reserve1,20,0001,30,000 Plant & Machinery 2,70,000 2,90,000
Profit & Loss A/c1,00,0001,20,000 Building3,70,000 3,60,000
Sundry Creditors1,10,0001,20,000 Stock2,60,000 2,40,000
Bills Payable70,00030,000 Sundry Debtors1,90,000 2,20,000
Bank Overdraft1,40,000— Cash & Bank30,00040,000
Provision for taxes80,0001,00,000
11,20,00012,00,00011,20,000 12,00,000
Additional information :
(1)During the current year an interim dividend of ₹ 50,000 was paid.
(2)The assets of Seema Ltd. were purchased on first day of the current year for ₹ 2,00,000 payable in fully paid shares of the company. These assets consisted of stock ₹ 80,000, machinery ₹ 70,000 and goodwill ₹ 50,000.
In addition company purchased a machine worth ₹ 20,000.
(3)Income tax paid during the current year amounted to ₹ 60,000.
(4)The net profit for the current year before tax was ₹ 1,60,000.

Particulars	(in ₹)	(in ₹)
Cash Flow from Operating Activities
		3,500
Net Profit for the year (11,500-8,000)
Loss on sale of Machinery	1,000
Depreciation current year	5,000
Dividend Paid	11,500
Profit on Redemption of Debenture	(400)
		17,100
Operating profit before working capital changes
		20,600
Increase in stock	(12,000)
Decrease in debtors	12,000
Increase in prepaid Exp.	(500)
Decrease in Creditors	(3,500)
Decrease in out. Exp.	(500)
		(4,500)
Net Cash Flow from Operating Activities (A)
Cash Flow from Investing Activities
Sale of Machinery
Purchase of Machinery
Net Cash flow from Investing activities (B)
Cash Flow from Financing Activities
Dividend Paid
Redemption of debentures
Net Cash Flow from Financial Activities (C)
Net decrease in Cash and Cash Equivalents (A+B+C)
Cash and Cash Equivalents at the beginning
Cash and Cash Equivalents at the end
		16,100
	2,000
	(15,000)
		(13,000)
		(21,100)
	(11,500) (9,600)
		(18,000) 1,00,000
		82,000

	1.04.2024	31.03.2025
Cash & Bank Balance	₹ 45,000	₹ 45,000
Temporary Investment	₹ 55,000	₹ 37,000
	₹ 1,00,000	₹ 82,000

Particulars	(Amount in ₹)	Particulars	(Amount in ₹)
To Balance b/d	26,000	By Cash (Sales)	2,000
To Cash	15,000	By P&L (Loss on sale )	1,000
(Purchase)		By Provision for	3,000
		depreciation
		By Balance c/d	35,000
	41,000		41,000

Particulars	Amount ( ₹ )	Amount ( ₹ )
A. Cash Flow from Operating Activities
Cash Sales		1,60,00,000*
(-) Cash payments
Payment to suppliers	80,00,000
Wages paid	45,00,000
Office expenses paid	9,00,000	1,34,00,000
		26,00,000
(-) Income tax paid		8,00,000
		18,00,000
B. Cash Flow from Investing Activities
Sale of Investments	64,00,000
Purchase of furniture	(20,00,000)	44,00,000
C. Cash Flow from Financing Activities
Bank loan repaid with interest	(17,50,000)
Dividend paid with distribution tax	(5,00,000)	(22,50,000)
Cash Flow from all Activities (A+B+C)		39,50,000
D. Opening Cash and Cash Equivalent		10,00,000
E. Closing Cash and Cash Equivalent		49,50,000

Difference between Opening and Closing Cash and Cash Equivalent (A)	₹ 39,50,000
Cash Flow from Investing Activities (B)	₹ 44,00,000
Cash Flow from Financing Activities (C)	₹ (22,50,000)
Cash Flow from Operating Activities (B+C) - A	₹ 18,00,000
Cash Outflows in Operating Activities
Payment to suppliers	₹ 80,00,000
Wages paid	₹ 45,00,000
Office expenses paid	₹ 9,00,000
Income tax paid	₹ 8,00,000
Total	₹ 142,00,000
Cash Flow from Operating Activities (required)	₹ 18,00,000
Cash Sales	₹ 1,60,00,000

Total Finance required for expansion project	₹ 1500 crore
Equity Capital	40%	₹ 600 crore
Debt Capital	60%	₹ 900 crore

Secured Loans	4000
Unsecured Loans	2500
Amount raised from secured debt capital for new project	900
Total debt capital	7400
Interest Cost @13%	962

Land and Building Account
Particulars	in ₹	Particulars	in ₹
To balance b/d	6,90,000	By depreciation	1,80,000
To Purchase (Bank)	6,60,000	By balance c/d	11,70,000
	13,50,000		13,50,000
Plant and Machinery Account
Particulars	in ₹	Particulars	in ₹
To balance b/d	2,56,200	By depreciation	1,50,000
To Purchase (Bank)	3,13,800	By balance c/d	4,20,000
	5,70,000		5,70,000
Furniture Account
Particulars	in ₹	Particulars	in ₹
To balance b/d	16,500	By depreciation	3,600
To Purchase (Bank)	6,600	By balance c/d	19,500
	23,100		23,100
Provision for Taxation Account
Particulars	in ₹	Particulars	in ₹
To Bank	67,500	By balance b/d	67,500
To balance c/f	1,21,500	By P & L	1,21,500
	1,89,000		1,89,000

Particulars	Amount	A m ount
	(in Lakhs)	(in Lakhs)
(A) Cash Flow from Operating Activities:
Cash receipts from customers	2800
Less : Cash paid to suppliers	(2000)
Overhead Expenses	(200)
Wages and Salaries	(100)
Cash Generated from Operations		500
Less : Income tax paid		(250)
Net Cash Flow from Operating Activities. (a)		250
(B) Cash Flow from Investing Activities:
Purchases of Fixed Assets	(200)
Proceeds from Sale of Fixed Assets	100
Net Cash used in Investing Activities (b)		(100)
(C) Cash Flow from Financing Activities:
Issue of Equity Shares	300
	(300)
Repayment of Bank Loan
Dividend paid
	(50)
Net Cash used in Financing Activities (c)		(50)
Net Increase in cash and cash equivalents (a+b+c)		100
Add: Cash and cash equivalents at the beginning of the period		50
Cash and cash equivalents at the end of the period		150
(Note: The figures in brackets show cash out flow)

Net profit after tax for the year 2018-19					18,35,000
During the year 2018-19
	·		Depreciation written off		1,08,000
	·	Goodwill written off			50,000
	·		Provision made for taxation		5,50,000
·		Income tax paid			4,80,000
·				Interest on Investment credited to Profit and
Loss Account					25,000
·		Interim dividend paid			2,10,000

Particulars	Rs.
Surplus as on 31-3-19	222
Less : surplus as on 31-3-18	(165)
Add : Transfer to General Reserves	55
Add : provision for tax	96
Profit before taxes and extraordinary items	208
Adjustment for Depreciation:
Land and Building (Rs. 430 – Rs. 387)	43
Plant and Machinery (15% of Rs 300)	45
Loss on sale of Plant and machinery (Rs. 29 – Rs. 21)	8
Goodwill written off (Rs. 60 – Rs. 47)	13
Premium on redemption of debenture written off	15
Operating profit before working capital changes	332
Working capital changes:
Increase in Investment (Trading)	(5)
Decrease in prepaid expenses	2
Decrease in inventory	12
Increase in trade receivables	(35)
Increase in trade payables	17
Decrease in outstanding expenses	(5)
Cash generated from outstanding operations	318
Income tax paid	(76)
Net cash inflow from operating activities	242

Particulars	Rs.	Particulars		Rs.
To bank a/c (bal fig)	76	By balance b/d		78
To balance c/d	98		By profit ad loss a/c	96
	174			174

Equity & Liabilities	Previous	Current	Assets	Previous	Current
Year ( ₹ )		Year ( ₹ )		Year ( ₹ )	Year ( ₹ )
Share Capital	5,00,000		7,00,000 Goodwill	—	50,000
General Reserve	1,20,000				1,30,000 Plant & Machinery 2,70,000 2,90,000
Profit & Loss A/c	1,00,000		1,20,000 Building		3,70,000 3,60,000
Sundry Creditors	1,10,000		1,20,000 Stock		2,60,000 2,40,000
Bills Payable	70,000		30,000 Sundry Debtors		1,90,000 2,20,000
Bank Overdraft	1,40,000		— Cash & Bank	30,000	40,000
Provision for taxes	80,000	1,00,000
	11,20,000	12,00,000			11,20,000 12,00,000

Net Profit before Tax & Extraordinary items:	1,60,000
Depreciation on Plant & Machinery	70,000
Depreciation on Land & Building	10,000
	2,40,000
Decrease in Stock (2,60,000+80,000-2,40,000)	1,00,000
Increase in Debtors	(30,000)
Increase in Creditors	10,000
Decrease in bills payable	(40,000)
	2,80,000
Income Tax paid	(60,000)	2,20,000

Payments of Bank overdraft	(1,40,000)
Interim dividend paid	(50,000)	(1,90,000)
Net increase in cash and cash equivalents (A+B+C)		10,000
Cash & Bank Balance at the beginning		30,000
Cash & Bank Balance at the end		40,000

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