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4. Cash & Cash equivalents 2,76,000 1,85,000 Further information related to Profit and loss A/c for the year ended March, 2025 is as under: (i) Profit before tax is ` 45,000 (ii) Tax expense during the year ` 15,000 (it includes deferred tax liability of ` 6,000 created during the year) (iii) Depreciation charged on furniture and fixture for the year was ` 35,000. One old furniture item was sold for ` 17,000 and the profit on such disposal amounting to current year ` 8,000 was booked in the current year. Prepare a Cash Flow Statement for the year ended 31st March, 2025. (7 Marks) (

Options

AMoon Ltd. Cash Flow Statement for the year ended 31st March, 2025 ` ` Cash flows from operating activities Net Profit before taxation 45,000 Adjustments for: Depreciation 35,000 Profit on sale of Furniture & Fixtures (8,000) Operating profit before working capital changes 72,000 Increase in Trade receivables (10,000) Increase in inventories (50,000) Increase in Trade payables 15,000 Cash generated from operations 27,000 Income taxes paid (W.N.1) (4,000) Net cash generated from operating activities 23,000 Cash flows from investing activities Sale of Furniture & Fixtures 17,000 Purchase of Furniture & Fixtures (W.N.2) (1,49,000) Net cash used in investing activities (1,32,000) Cash flows from financing activities Issue of shares for cash 2,00,000 Net cash generated from financing activities 2,00,000 Net decrease in cash and cash equivalents 91,000 Cash and cash equivalents at beginning of period (31.3.2024) 1,85,000 Cash and cash equivalents at end of period (31.3.2025) 2,76,000 Working Notes: `
BXY Limited reported a Profit Before Tax (PBT) of ` 18 lakhs for the third quarter ending 31st December 2024. Following observations are noted; (i) Dividend income of ` 8 lakhs received during the quarter has been recognized to the extent of ` 2 lakh only. (ii) Sales promotion expenses ` 15 lakhs incurred in the third quarter, 70% has been deferred to the fourth quarter as the sales in the last quarter is high. (iii) In the third quarter, the company changed depreciation method from WDV to SLM, which resulted in excess depreciation of ` 4 lakhs. The ADVANCED ACCOUNTING entire amount has been debited in the third quarter, though the share of the third quarter is only ` 1 lakhs. (iv) ` 3 lakhs extra-ordinary gain received in third quarter was allocated equally to the third and fourth quarter. (v) Cumulative loss resulting from change in method of inventory valuation was recognized in the third quarter of ` 5 lakhs. Out of this loss ` 2 lakhs relates to previous quarters. (vi) Sale of investment in the first quarter resulted in a gain of ` 30 lakhs. The company had apportioned this equally to the four quarters. Calculate the result of the third quarter as per AS 25 and also comment on the company's view on each observation. (7 Marks) Answer (
C
D
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Correct Answer

✅ Option A — Moon Ltd. Cash Flow Statement for the year ended 31st March, 2025 ` ` Cash flows from operating activities Net Profit before taxation 45,000 Adjustments for: Depreciation 35,000 Profit on sale of Furniture & Fixtures (8,000) Operating profit before working capital changes 72,000 Increase in Trade receivables (10,000) Increase in inventories (50,000) Increase in Trade payables 15,000 Cash generated from operations 27,000 Income taxes paid (W.N.1) (4,000) Net cash generated from operating activities 23,000 Cash flows from investing activities Sale of Furniture & Fixtures 17,000 Purchase of Furniture & Fixtures (W.N.2) (1,49,000) Net cash used in investing activities (1,32,000) Cash flows from financing activities Issue of shares for cash 2,00,000 Net cash generated from financing activities 2,00,000 Net decrease in cash and cash equivalents 91,000 Cash and cash equivalents at beginning of period (31.3.2024) 1,85,000 Cash and cash equivalents at end of period (31.3.2025) 2,76,000 Working Notes: `

All Options:

  • AMoon Ltd. Cash Flow Statement for the year ended 31st March, 2025 ` ` Cash flows from operating activities Net Profit before taxation 45,000 Adjustments for: Depreciation 35,000 Profit on sale of Furniture & Fixtures (8,000) Operating profit before working capital changes 72,000 Increase in Trade receivables (10,000) Increase in inventories (50,000) Increase in Trade payables 15,000 Cash generated from operations 27,000 Income taxes paid (W.N.1) (4,000) Net cash generated from operating activities 23,000 Cash flows from investing activities Sale of Furniture & Fixtures 17,000 Purchase of Furniture & Fixtures (W.N.2) (1,49,000) Net cash used in investing activities (1,32,000) Cash flows from financing activities Issue of shares for cash 2,00,000 Net cash generated from financing activities 2,00,000 Net decrease in cash and cash equivalents 91,000 Cash and cash equivalents at beginning of period (31.3.2024) 1,85,000 Cash and cash equivalents at end of period (31.3.2025) 2,76,000 Working Notes: ` ✓
  • BXY Limited reported a Profit Before Tax (PBT) of ` 18 lakhs for the third quarter ending 31st December 2024. Following observations are noted; (i) Dividend income of ` 8 lakhs received during the quarter has been recognized to the extent of ` 2 lakh only. (ii) Sales promotion expenses ` 15 lakhs incurred in the third quarter, 70% has been deferred to the fourth quarter as the sales in the last quarter is high. (iii) In the third quarter, the company changed depreciation method from WDV to SLM, which resulted in excess depreciation of ` 4 lakhs. The ADVANCED ACCOUNTING entire amount has been debited in the third quarter, though the share of the third quarter is only ` 1 lakhs. (iv) ` 3 lakhs extra-ordinary gain received in third quarter was allocated equally to the third and fourth quarter. (v) Cumulative loss resulting from change in method of inventory valuation was recognized in the third quarter of ` 5 lakhs. Out of this loss ` 2 lakhs relates to previous quarters. (vi) Sale of investment in the first quarter resulted in a gain of ` 30 lakhs. The company had apportioned this equally to the four quarters. Calculate the result of the third quarter as per AS 25 and also comment on the company's view on each observation. (7 Marks) Answer (
  • C
  • D

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Detailed Solution & Explanation

This question is a parsed fragment from the Suggested Answer of the examination. It presents details of the revised Balance Sheet or Note to Accounts under the Reconstruction Scheme or Cash Flow Statement as per AS 3. Based on the parsed data and structural context in the suggested answers, Option A is the correct answer.
Hence, **Option A** is the correct answer.

Key Concepts to Understand

Depreciation

Allocation of the cost of a tangible fixed asset over its useful life due to wear and tear, efflux of time, or obsolescence.

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