Page 18 - 27. COMPILER QB - IND AS 7

Goodwill 9,000
Cash consideration paid 37,000
You are required to prepare the Consolidated Statement of Cash Flows for the financial year ended March 31st,
2020 in accordance with Ind AS 7.

SOLUTION
Cash flow Statement for 31st March 2020

Cash from operating activities:
Net profit after tax 27,500
Adjustment for non-cash / non-operating items:
Provision for tax 7,500
Depreciation 15,000
Interest 2,000
Adjustment for changes in working capital:
Trade receivables (25000+4000-27000) 2,000
Inventories (17500+2000-15000) 4,500
Trade payables (30000+16000-34000) (12,000)
Cash flow from operations 46,500
Less: Tax paid (5500+7500-6000) (7,000)
Cash flow from Operating Activities (A) 39,500

Cash flow from investing activities
Subsidiary acquired (37000 – 1000) (36,000)
Cash flow from investing activities (B) (36,000)
Cash flow from financing activities
Interest paid (2,000)
Cash flow from financing activities (C) (2,000)
Cash flow Statements –
Opening balance of cash and cash equivalents 2,500
Net increase in cash and cash equivalents. (a + b + c) 1,500
Closing balance of cash and cash equivalents 4,000

Q13 (December 21 – 6 Marks)

In the year 2021-22, One Land was sold for Rs. 5 Crores and another land purchased for Rs. 3 Crores by XYZ
Limited. The company reported cash flow on a net basis in the cash flow statement i.e. Rs. 2 Crores in
Investing Activity as cash receipt from the sale of land. Advise whether the treatment given as above is
correct as per provisions of IND AS 7. Also, calculate the cash flow from operations from indirect method from
the following information:

Operating Statement of XYZ Limited for the year ended March 31, 2021
Particulars Amount
Sales 20,00,000
Less: Cost of Goods Sold 14,00,000
Administration and selling overheads 2,20,000
Depreciation 28,000
Interest paid 12,000

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