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Prepare a schedule of changes in working capital and statements of funds of flownBalance 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 |
FUNDS FLOW STATEMENT
| 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
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