Question

2. From the following Balance sheet of 'X' Ltd., you are required to prepare schedule of changes in working capital and statement of flow of funds. Particulars Dec. 31 Dec. 31st. 2008 2009 Assets- $ $ Land & Building 50,000 50,000 Plant 24,000 34,000 Inventories 9,000 7,000 Receivables 16,500 19,500 Cash and Bank 4,000 9,000 119,500 103,500 Capital and Liabilities Capital 80,000 85,000 Retained Earnings Payables 14,500 24,500 9,000 5,000 Mortgage 5,000 119,500 103,500

Answer 1

Solution -

Schedule of changes in working capital 2008 2009 Changes in working capital Increase in $) Decrease (In $) 4000 Current Assets Cash and bank Account receivable Inventories 5000 3000 16500 9000 29500 9000 19500 7000 35500 2000 4000 Less Current Liablities Account payable Working Capital Increase in W.C 5000 30500 9000 20500 10000 30500 10000 12000 30500 12000 Issue of share Gain in retained earnings Mortgage taken Fund Flow Statement Amount in $ 5000 Purchase of plant 10000 Increase in Working capital 5000 20000 Amount in $ 10000 10000 20000