CMA Intermediate · Corporate Accounting and Auditing · Cash Flow Statement
Kaveri Ltd's share capital rose from ₹20,00,000 to ₹26,00,000 during the year. ₹1,50,000 of the increase was bonus shares issued out of general reserve, and the remainder was shares issued for cash at a premium of ₹2,00,000 over face value. What is the net cash inflow from this issue under financing activities?
The cash inflow is ₹6,50,000. Share capital increased by ₹6,00,000, of which ₹1,50,000 was a non-cash bonus issue, leaving ₹4,50,000 raised in cash at face value. Adding the ₹2,00,000 securities premium gives the financing inflow.
- A₹6,00,000
- B₹6,50,000Correct
- C₹4,50,000
- D₹8,00,000
Explanation
Cash raised at face value = 6,00,000 - 1,50,000 bonus = 4,50,000. Add premium 2,00,000 to get 6,50,000 inflow. The bonus issue is non-cash and is excluded. Taking 6,00,000 ignores both the bonus exclusion and the premium.
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