Following extracts of Balance Sheet is taken from the financial statements of PQR limited.
|
Particulars |
2021-22 |
2020-21 |
|
Equities and Liabilities |
|
|
|
Shareholders Funds |
|
|
|
(a) Equity share capital |
20,00,000 |
20,00,000 |
|
(b) Preference Share capital (8%) |
7,50,000 |
5,00,000 |
|
Reserves and Surplus |
|
|
|
Statement of Profit & Loss |
4,50,000 |
3,00,000 |
An interim dividend of 10% was declared on Equity Share.
Preference Shares were issued on 31st March 2022.
Net cash flows during the year from Financing Activities will be:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) - ₹10,000 inflow.
Dividend on preference shares = 5,00,000 x 8/100
= 40,000 (outflow)
Dividend on equity shares = 20,00,000 x 10/100
= 2,00,000 (outflow)
Issued preference shares = 7,50,000 - 5,00,000
= 2,50,000 (inflow)
All are financing activity.
Cash flow from financing activity = 2,50,000 - 2,00,000 - 40,000
= 2,50,000 - 2,40,000
= 10,000 inflow