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From the following balance sheets, prepare Funds Flow Statement.

Liabilities 2014 2015 Assets 2014 2015
Share capital  2,00,000 2,50,000 Cash 30,000 47,000
Creditors 70,000 45,000 Debtors 1,20,000 1,15,000
Retained Earnings 10,000 23,000 Stock 80,000 90,000
Land 50,000 66,000
2,80,000 3,18,000 2,80,000 3,18,000

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   Fund Flow Statement

Source of funds Amount (Rs.) Application of fund Amount (Rs.)
Issue of shares 50,000 Purchase of Land 16,000
Fund from operation 13,000 Increase in working capital 47,000
63,000 63,000

Workings: 

(i) Statement of changes in working capital

2014 2015 Increase Decrease
Current Assets:
Cash 30,000 47,000 17,000
Debtors 1,20,000 1,15,000 5,000
Stock 80,000 90,000 10,000
Current liabilities:
Creditors  70,000  45,000 25,000
52,000 5,000

Net Increase in Working Capital: Rs. 47,000

(ii) Calculation of Funds From Operations 

Profit and Loss Adjustment Account

Particulars Amount (Rs.)  Particulars Amount (Rs.)
To balance c/d 23,000 By Balance b/d 10,000
By Funds From Operations (balancing figure) 13,000
23,000 23,000

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