Prepare a schedule of changes in working capital and statements of funds of flow
Balance sheet as on 31st March

Liabilities	2004	2005	Assets	2004	2005
Share capital	150000	180000	Land and building	85000	85000
Profit and loss a/c Loans	35000	42000	Plant and machinery	54000	70000
Loans	2000	15000	stock	30500	50000
Creditors	17000	23000	Debtors	25500	45000
Bills payable	3000	1000	Bills receivable	5000	2000
			Cash	7000	9000
	207000	261000		207000	261000

SOLUTION

The solution is as follows −

Working capital= current assets – current liabilities

Changes in working capital

Particulars	2004 (Rs.)	2005 (Rs.)	Incharge (Rs.)	Decharge (Rs.)
Current Assets
Stock	30500	50000	19500
Debtors	25500	45000	19500
Bills Receivable	5000	1000		2000
Cash	7000	9000	2000
Total (X)	68000	106000
Current liabilities
Creditors	17000	23000		6000
Bills payable	3000	1000	2000
Total (Y)	20000	24000	43000	8000
X-Y	48000	82000		35000
Increase in W.C.	34000	34000	43000	43000

Source	Rs.	Application	Rs.
Issued share capital	30000	Purchase of plant and machinery	16000
Loan	13000	Increase in working capital	34000
Funds from operations	7000
	50000		50000

Funds from operations = 42000-35000 = 7000 (profit and loss a/c)

Increase in working capital = 82000-48000 = 34000

Mandalika

Updated on: 11-Aug-2020

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