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12 % preference share capital kisme ata Hain
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12 % preference share capital kisme ata Hain Related: Preparation of ...
It will be shown under cash flow from financing activities under the head proceeds of issue of shares and debentures.
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12 % preference share capital kisme ata Hain Related: Preparation of ...
Preference Share Capital

Preference share capital refers to the capital raised by a company by issuing preference shares to investors. Preference shares are a type of equity security that gives shareholders certain preferential rights over common shareholders, such as a fixed dividend payment and preference in case of liquidation.

Preparation of Cash Flow Statement

The cash flow statement is a financial statement that shows the inflows and outflows of cash and cash equivalents during a specific period. It provides information about a company's ability to generate cash and the sources and uses of that cash. The cash flow statement is divided into three main sections: operating activities, investing activities, and financing activities.

Operating Activities

Operating activities include cash flows from the company's core business operations. These activities involve the production and delivery of goods or services. Cash inflows from operating activities include cash received from customers, interest received, and dividends received. Cash outflows include cash paid to suppliers, employees, and other operating expenses.

Investing Activities

Investing activities include cash flows related to the acquisition and disposal of long-term assets and investments. Cash inflows from investing activities include cash received from the sale of property, plant, and equipment, as well as dividends received from investments. Cash outflows include cash paid for the purchase of property, plant, and equipment, as well as investments in other companies.

Financing Activities

Financing activities include cash flows related to the raising and repayment of capital. Cash inflows from financing activities include cash received from issuing shares, taking loans, and issuing bonds. Cash outflows include cash paid for the repayment of loans, payment of dividends, and repurchasing of shares.

Preference Share Capital in the Cash Flow Statement

Preference share capital is included in the financing activities section of the cash flow statement. It represents the cash inflow received by the company from the issuance of preference shares. This cash inflow is classified as a financing activity because it represents the company's capital raising activities.

The preference share capital inflow is reported as an increase in cash and cash equivalents in the financing activities section of the cash flow statement. It is important to note that the preference share capital inflow does not represent revenue or income for the company but rather a source of financing.

In conclusion, preference share capital is included in the financing activities section of the cash flow statement as it represents the cash inflow received from the issuance of preference shares. This inflow is reported as an increase in cash and cash equivalents and is classified as a financing activity.
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12 % preference share capital kisme ata Hain Related: Preparation of Cash flow Statement - Class 12, Accountancy?
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