Prepare a Cash Flow Statement on the basis of the information given in the Balance Sheets of Liva Ltd. as at 31-3-2013 and 31-3-2012:
Notes to Accounts: 
Note 1

Particulars

2013
Rs

2012
Rs

Reserves and Surplus
Surplus (balance in statement of profit and loss)

1,32,000

24,000






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Under which type of activity will you classify Dividend received by a financial company while preparing Cash Flow Statement? 


Dividend received by a financial company is classified under operating activity while preparing Cash Flow Statement.

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State the purpose of preparing a Cash Flow Statement.


The important objectives for preparing Cash Flow Statement are as follows.
i. It helps to ascertain the gross inflows and outflows of cash and cash equivalents from various activities.
ii. Secondly, Cash Flow Statement helps in analysing various reasons responsible for the changes in the cash balances during an accounting year. 

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What is meant by Cash from Operating Activities? 


Operating activities are the principal revenue producing activities of the enterprise. Cash flow from operating activities are derived from the principal revenue producing activities of the business. In other words, cash from Operating Activities means receipts of cash and cash equivalents in exchange of sale of produced goods and services.

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While preparing Cash Flow Statements what type of activity is, Payments of Cash to acquire Debentures by an investment company?


For an Investment Company, payment of cash to acquire debentures is as an operating activity. As for them it is a part of their daily business operation.

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