Question 2: Looking at the position statement of the firm over the last two years, Hope was quite happy that the performance of the firm had changed for the better. Her friend, Despair, looked over the numbers and appeared unsatisfied with the performance. She suggested, that the best way to look at the performance would be to prepare a cash flow statement of the firm and evaluate it. The balance sheet of M/s Hope Imports Limited, as at March 31, 20X9 and 20x0, are as follows (all figures in INR): M/s Little Flower Imports Limited : Balance sheet as on March 31" (All figures in lakhs) 20x0 20x9 150 20х0 Liabilities & Equity Share capital Reserves Debentures Proposed Dividend Sundry Creditors Assets 20x9 Land 120 120 150 Machine (Cost less dep) 80 100 20 30 Investments 10 10 15 15 Closing stock Debtors 15 20 20 50 20 30 50 50 Bills Receivable 10 Cash at Bank Total Assets 4 5 255 295 Total Liabilities |255 295 You are also provided with some additional information for the year which is as follows: Depreciation on machinery Dividend for 20x9 paid All figures in lakhs 20 20 Prepare a cash flow statement to show the cash flow from various activities of M/s Hope Imports Limited. Regarding the cash flow position, whom would you agree with, Despair or Hope? Why?
Question 2: Looking at the position statement of the firm over the last two years, Hope was quite happy that the performance of the firm had changed for the better. Her friend, Despair, looked over the numbers and appeared unsatisfied with the performance. She suggested, that the best way to look at the performance would be to prepare a cash flow statement of the firm and evaluate it. The balance sheet of M/s Hope Imports Limited, as at March 31, 20X9 and 20x0, are as follows (all figures in INR): M/s Little Flower Imports Limited : Balance sheet as on March 31" (All figures in lakhs) 20x0 20x9 150 20х0 Liabilities & Equity Share capital Reserves Debentures Proposed Dividend Sundry Creditors Assets 20x9 Land 120 120 150 Machine (Cost less dep) 80 100 20 30 Investments 10 10 15 15 Closing stock Debtors 15 20 20 50 20 30 50 50 Bills Receivable 10 Cash at Bank Total Assets 4 5 255 295 Total Liabilities |255 295 You are also provided with some additional information for the year which is as follows: Depreciation on machinery Dividend for 20x9 paid All figures in lakhs 20 20 Prepare a cash flow statement to show the cash flow from various activities of M/s Hope Imports Limited. Regarding the cash flow position, whom would you agree with, Despair or Hope? Why?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Question 2: Looking at the position statement of the firm over the last two years, Hope was quite
happy that the performance of the firm had changed for the better. Her friend, Despair, looked over
the numbers and appeared unsatisfied with the performance. She suggested, that the best way to
look at the performance would be to prepare a cash flow statement of the firm and evaluate it.
The balance sheet of M/s Hope Imports Limited, as at March 31, 20X9 and 20X0, are as follows (all
figures in INR):
M/s Little Flower Imports Limited : Balance sheet as on March 31“ (All figures in lakhs)
20x0
Liabilities & Equity
Share capital
| Assets
20x9
20x9
20x0
Land
120
120
150
150
Machine (Cost less dep)
Investments
Closing stock
80
100
Reserves
20
30
10
10
Debentures
15
15
Proposed Dividend
Sundry Creditors
15
20
20
50
Debtors
20
30
50
50
Bills Receivable
6
10
Cash at Bank
4
5
Total Assets
255
295
Total Liabilities
255
295
You are also provided with some additional information for the year which is as follows:
All figures in lakhs
Depreciation on machinery
Dividend for 20x9 paid
20
20
Prepare a cash flow statement to show the cash flow from various activities of M/s Hope Imports
Limited. Regarding the cash flow position, whom would you agree with, Despair or Hope? Why?
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