Question

On 31st March, 2024 following is the Balance Sheet of Bhavik Limited: \textit{[Balance Sheet \& Notes Summary: See Thought Block Analysis]}
\textbf{Additional Information:

Hint:

For Cash Flow Statement (Investing \& Financing): - Investing: Focus on purchase/sale of Non-Current Assets (PPE, Intangibles, Investments). Sale proceeds are inflow, purchases are outflow. Interest/Dividends Received are also Investing inflows.
- Financing: Focus on changes in Non-Current Liabilities (Loans, Debentures) and Shareholders' Funds (Share Capital). Issue of shares/debentures is inflow, redemption/buyback/repayment is outflow. Payment of Interest and Dividends are Financing outflows.
- Use comparative Balance Sheets and Additional Info. Prepare ledger accounts (e.g., Fixed Asset A/c, Acc Dep A/c) if needed to find missing figures like purchases or depreciation.

Answer 1

Analysis \& Workings: \textit{1. Property, Plant and Equipment (PPE) / Machinery Account:} \begin{itemize} \item Opening PPE (Gross Block - Machinery) = 16,00,000 (from 2023 B/S Note 4) \item Closing PPE (Gross Block - Machinery) = 21,50,000 (from 2024 B/S Note 4) \item Machinery Sold: Cost 8,00,000. \item Entry to remove sold asset from Gross Block: Realisation/Disposal A/c Dr 8,00,000 To Machinery A/c Cr 8,00,000. \item Machinery A/c (Gross Block): Opening 16L + Purchase (Bal Fig) - Sold 8L = Closing 21.5L. \item Purchase = 21.5L - 16L + 8L = Rs 13,50,000 (Outflow - Investing). \end{itemize} \textit{2. Accumulated Depreciation Account:} \begin{itemize} \item Opening Acc Dep = 1,00,000 (from 2023 B/S Note 4) \item Closing Acc Dep = 2,50,000 (from 2024 B/S Note 4) \item Acc Dep on Machinery Sold = 50,000. \item Entry to remove sold asset's dep: Acc Dep A/c Dr 50,000 To Realisation/Disposal A/c Cr 50,000. \item Acc Dep A/c: Opening 1L - Dep on Sold 50k + Dep for Year (Bal Fig) = Closing 2.5L. \item Dep for Year = 2.5L - 1L + 50k = Rs 2,00,000 (Added back in Operating Activities - not asked here). \end{itemize} \textit{3. Sale of Machinery - Gain/Loss:} \begin{itemize} \item Book Value of Machinery Sold = Cost - Acc Dep = 8,00,000 - 50,000 = Rs 7,50,000. \item Sale Proceeds = Rs 6,50,000 (Inflow - Investing). \item Loss on Sale = Book Value - Sale Proceeds = 7,50,000 - 6,50,000 = Rs 1,00,000 (Added back in Operating - not asked). \end{itemize} \textit{4. Non-current Investments:} \begin{itemize} \item Opening Balance (Implied from comparison, not shown separately in image, but assumed part of Assets) - Let's check B/S image again. Yes, Non-current Investments: 2023: 4,00,000, 2024: 3,00,000. \item Decrease indicates Sale of Investments = 4,00,000 - 3,00,000 = Rs 1,00,000 (Inflow - Investing, assuming sold at book value). \end{itemize} \textit{5. Share Capital:} \begin{itemize} \item Opening = 10,00,000. Closing = 12,00,000. \item Increase indicates Issue of Shares = 12,00,000 - 10,00,000 = Rs 2,00,000 (Inflow - Financing). \end{itemize} \textit{6. Long-term borrowings (10 Debentures):} \begin{itemize} \item Opening = 10,00,000. Closing = 6,00,000. \item Decrease indicates Redemption of Debentures = 10,00,000 - 6,00,000 = Rs 4,00,000 (Outflow - Financing). \end{itemize} \textit{7. Interest on Debentures (Implied):} \begin{itemize} \item Debentures were outstanding during the year (Opening 10L). Interest should be paid. Redemption was on 31-03-2024 (end of year). \item Interest = 10 on Opening Balance = 10 of 10,00,000 = Rs 1,00,000 (Outflow - Financing). (Also deducted in Operating). \end{itemize} \textit{8. Dividends (Implied):} \begin{itemize} \item Compare Reserves \& Surplus: Opening 3L, Closing 4L. Profit for year contributes. Check P\. (Not given, but usually dividends paid are Financing outflows. Assume no dividends paid for lack of info). \end{itemize}