Following are the balance sheets of Shanti Niketan limited as on 31st

Question

Following are the balance sheets of Shanti Niketan limited as on 31st December, 2018 and 2019.

Liabilities	2018 (Rs.)	2019 (Rs.)	Assets	2018 (Rs.)	2019 (Rs.)
Share	65,000	85,000	Goodwil	3,000	2,500
Capital	12,000	14,500	Buildings	52000	50,000
Reserves	8,600	9000	Plant	40,000	41,000
P. & L A/c		...	Stock	20,500	18,800
Bank loan	20,000		Debtors	41,000	36,200
(Long-term)	40,000	35,000	Cash	100	650
Creditors	11,000	7,500	Bank	...	1850
Bills
Payable
	1,56,600	1,51,000		1,56,600	1,51,000

Taking into account the following additional information, you are required to prepare funds flow statement and statement of changes in working capital.

(a) Dividend paid was Rs.6,000/-

(b) Rs.3,600/- was written off as depreciation on plant and Rs.2,950/- on buildings.

25 Nov 2020

Answer :

Word Count : 643

To prepare a funds flow statement and a statement of changes in working capital for Shanti Niketan Limited, we need to analyze the changes in its balance sheet from 2018 to 2019 and consider the given additional information. Let's start by calculating the changes in various items on the balance sheet.

Changes in Liabilities:
1. Share Capital increased by Rs.20,000 (85,000 - 65,000).
2. Reserves increased by Rs.400 (9,000 - 8,600).
3. Long-term Bank Loan decreased by Rs.5,000 (35,000 - 40,000).
4. Creditors decreased by Rs.3,500 (7,500 - 11,000).
5. Bills Payable and Payable remained the same, so no change.

Changes in Assets:
1. Goodwill decreased by Rs.500 (2,500 - 3,000).
2. Buildings remained the same.
3. Plant increased by Rs.1,000 (41,000 - 40,000).
4. Stock decreased by Rs.1,700 (18,800 - 20,500).
5. Debtors decreased by Rs.4,800 (36,200 - 41,000).
6. Cash increased by Rs.550 (650 - 100).
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