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CA Intermediate · Advanced Accounting · AS 3 Cash Flow Statement

In the year, Anand Foods Ltd, a non-financial company, issued 40,000 equity shares of ₹10 each at ₹15, fully received in cash. It also made a bonus issue of ₹1,00,000 out of reserves, took a new bank term loan of ₹3,00,000, and redeemed debentures of ₹2,00,000 at a 5% premium in cash. It paid interest on borrowings of ₹48,000 and dividend of ₹90,000. What is the net cash from financing activities?

Net cash from financing activities is ₹5,52,000. Cash inflows are ₹6,00,000 from the share issue and ₹3,00,000 from the loan. Outflows are ₹2,10,000 for debenture redemption including premium, ₹48,000 interest and ₹90,000 dividend. The bonus issue involves no cash and is excluded.

  1. A₹5,52,000Correct
  2. B₹5,62,000
  3. C₹6,00,000
  4. D₹6,52,000

Explanation

Inflows: share issue 40,000 × 15 = 6,00,000 and term loan 3,00,000 = 9,00,000. Outflows: debenture redemption 2,00,000 × 1.05 = 2,10,000, interest 48,000 and dividend 90,000 = 3,48,000. Net = ₹5,52,000. The bonus issue is non-cash and is ignored; including it gives ₹6,52,000. Redeeming at face value gives ₹5,62,000. Leaving out interest gives ₹6,00,000.

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