Q2.

You are required to prepare a Schedule of changes in working capital and a

Funds Flow Statement from the Balance Sheets of Amazon Ltd as on 31st Dec. 2008
and 2009.

Liabilities 2008 2009 Assets 2008 2009

Rs. Rs. Rs. Rs.
Share capital 2,00,000 2,00,000 Goodwill 24,000 24,000
Gen. Reserve 28,000 36,000 Buildings 80,000 72,000
P&L A/c 32,000 26,000 Plant 74,000 72,000
Creditors 16,000 10,800 Investments 20,000 22,000
Bills payable 2,400 1,600 Stock 60,000 46,800
Provision for taxation 32,000 36,000 Bills receivable 4,000 6,400
Provision for doubtful Debtors 36,000 38,000
debts. 800 1,200 Cash & Bank balance 13,200 30,400

3,11,200 3,11,600 3,11,200 3,11,600

Additional information:
a) Depreciation provided on plant was Rs. 8,000 and on Buildings Rs. 8,000
b) Provision for taxation made during the year Rs. 38,000
c) Interim dividend paid during the year Rs. 16,000

Answer:
AMAZON LTD.
Statement of changes in Working Capital
2009 2008 Increase Working Capital
(Decrease)
Increase Decrease
Current Assets
Cash & Bank 30,400 13,200 17,200 17,200
Balance
Debtors 38,000 36,000 2,000 2,000
Bills receivable 6,400 4,000 2,400 2,400
Stock 46,800 60,000 (13,200) 13,200
Investments 22,000 20,000 2,000 2,000
Total 1,43,600 1,33,200 10,400

Current
Liabilities
Creditors 10,800 16,000 5,200 5,200
Bills payable 1,600 2,400 800 800
Provision for 36,000 32,000 4,000 4,000
taxation
Provision for 1,200 800 400 400
doubtful debts
Total 49600 51200 29600 17600
Working Capital 94000 82000 12000
Increase in 12000
Working Capital
 AMAZON LTD.
Funds Flow Statement

Sources of Funds
Funds from operations:
*Net income (P&L and dividend) 22000
_____

Add : Depreciation, Provisions:

Plant 8000
Buildings 8000
Taxation 2000
_____
40000
______

Uses of Funds
Payments of Dividend 16000
Investments 2000
Increase of Working Capital 12000
______
30000
______