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BRILLIANT’S T-20 Questions 493

Opening Cash & Bank Balance 5,00,300
Closing Cash & Bank Balance 6,98,800
Prepare cash flow statement (by indirect method) for the year 2017-2018 in accordance
with AS-3. [See Illustration 2.2.5]
Q.14. Prepare a working capital forecast from the following information: Production level
during the previous year was 10 lakh units. During the current year, the firm is likely
to maintain its level of production at the previous year's level. The expected ratio of costs
to selling price for the firm is as follows:
Raw Materials 40%
Direct Wages 20%
Overheads 20%
The past date of the firm tells that raw material normally remains in stores for a period of 3
months before production. Every unit of production remains in process for 2 months and is
assumed to be constituting of 100% of raw materials, wages and overheads. Finished goods
remain in the warehouse of the firm for 3 months. Credit allowed by creditors is 4 months from
the date of delivery of raw materials and credit given the customer is 3 months from the date of
dispatch. The firm on an average maintains a cash balance of ` 1,50,000. Wages and other expenses
are paid by the firm with a lag of 15 days. The selling price of the firm's products is ` 10 per unit.
The firm also maintains a contingency provision of 10% in addition to the regular cash.
[See Illustration 2.3.3]
st
Q.15. The Balance Sheet of W Ltd. as at 31 March, 2016 showed the following position:
Balance Sheet of W. Ltd as at 31st March, 2016
Particulars Note No. Amount
(`)

I. EQUITY AND LIABILITIES
(1) Shareholder's Funds:
(a) Share Capital - 20,000 Equity Shares of ` 100 each 20,00,000
(b) Reserves and Surplus - General Reserve 6,00,000
(c) Profit and Loss Account 3,50,000
(2) Share Application Money Pending Allotment:
(3) Non-current Liabilities: –
(4) Current Liabilities:
(a) Short-term Borrowings - Bank Loan 3,00,000
(b) Trade Payables - Creditors 4,00,000
(c) Short-term Provisions - Provision for Taxation 5,00,000
TOTAL 41,50,000
II. ASSETS
(1) Non-current Assets:
(a) Fixed Assets
(i) Tangible Assets
Factory Premises 11,50,000