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From the following Balance Sheet of JY Ltd. As at 31st March 2017, prepare a Cash Flow Statement:Notes to AccountsNote: Proposed Dividend for the years ended 31st March, 2016 and 2017 are Rs. 50,000 and Rs. 75,000 respectively.Additional Information: Rs. 1,00,000, 10% Debentures were issued on 31st March, 2017. This question is amended to comply with Accounting Standard 4 (Revised), Contingencies and Events Occurring After the Balance Sheet Date. |
Answer» Solution : Working Notes: `{:("1. Calculation of Net Profit before Tax and Extraordinary Items:","Rs."),("Net Profit for the year (Rs. 1,00,000 + Rs. 25,000)","1,25,000"),("Add: Proposed DIVIDEND (for 2016-17) paid during the year (WN-2)"," 50,000"),("Provision for Tax (2017-18)",ul"1,25,000"),(,ulul"30,00,000"):}` 2. Dividend proposed by the Board of Director's for a particular Accounting year is not a liability unless the same is approved by the shareholders in the Annual General Meeting (AGM). Therefore, the REVISED AS-4, CONTINGENCIES and Events OCCURRING after the Balance Sheet Date, that proposed dividend declared is not to be recognised as a liability at the Balance Sheet Date. It should be disclosed in the Notes to Accounts. In the next year, when such proposed dividend is declared in the AGM, following entries are passed and declared dividend is paid: `{:("Surplus,i.e.,Balance In Statement of Profit and Loss" ....Dr.),(ul("""To Dividend Payable A/c""")),("Divident Payable A/c"),("""To Bank A/c"""....Dr.):}` If should be noted that Current year's proposed dividend will not be CONSIDERED while preparing Cash Flow Statement. |
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