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12th | Cash Flow Statement | Question No. 13 To 16 | Ts Grewal Solution 2023-2024

Question 13:

Compute Cash Flow from Operating Activities from the following information:

 

 

Particulars

 `

Net Profit after Provision for Tax and Payment of Dividend

2,15,000

Provision for Tax

45,000

Final Dividend paid during the year

50,000

Depreciation

25,000

Loss on Sale of Machinery

10,000

Patents Amortised

30,000

Gain on Sale of Land

70,000

Income Tax Refund

30,000

 

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(`)

Amount

(`)

 

Net Profit after Provision for Tax and Proposed Dividend

 

2,15,000

 

Add: Provision for Tax

 

45,000

 

Add: Proposed Dividend

 

50,000

 

Profit Before Taxation

 

3,10,000

 

Items to be Added:

 

 

 

Depreciation

25,000

 

 

Loss on Sale of Machinery

10,000

 

 

Patents Amortised

30,000

65,000

 

 

 

3,75,000

 

Items to be Deducted:

 

 

 

Income Tax Refund

(30,000)

 

 

Gain on Sale of Land

(70,000)

(1,00,000)

 

Operating Profit before Working Capital Changes

 

2,75,000

 

Less: Net Tax Paid (45,000 – 30,000)

 

(15,000)

 

Net Cash Flows from Operating Activities

 

2,60,000

 

Question 14:

Calculate Cash Flow from Operating Activities from the following:

(i) Profit form the year is  ` 7,00,000 after considering the following items:

 

 

Particulars

(`)

Depreciation on Fixed Assets

40,000

Goodwill Amortised

20,000

Gain on Sale of Land

90,000

Appropriation of Profit towards General Reserve

60,000

 

 

 

 

(ii) Following is the position of Current Assets and Current Liabilities

 

 

 

Particulars

Closing Balance (`)

Opening Balance

(`)

Trade Payables

50,000

75,000

Trade Receivables

75,000

60,000

Prepaid Expenses

10,000

18,000

 

 

 

Answer:

Cash Flow from Operating Activities

 

Particulars

 (`)

 (`)

 

Profit as per Statement of Profit and Loss

 

7,00,000

 

Add: transfer to General Reserve

 

60,000

 

Profit Before Tax and Extraordinary items

 

7,60,000

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

40,000

 

 

Goodwill amortised                    

20,000

60,000

 

 

 

8,20,000

 

Items to be Deducted:

 

 

 

Profit on Sale of Land

 

(90,000)

 

Operating Profit before Working Capital Adjustments

 

7,30,000

 

Add: Prepaid Expenses

 

 8,000

 

 

 

7,38,000

 

Less: Trade payable

(25,000)

 

 

Less: Trade receivable

(15,000)

(40,000)

 

Net Cash Flows from Operating Activities

 

6,98,000

 

 

 

 


Note: There is a misprint in the answer given in the textbook. The correct amount for 'Net Cash Flows from Operating Activities' should be  ` 10,20,000 (as calculated above).

 

Question 15:

Charles Ltd. earned a profit of  ` 1,00,000 after charging depreciation of 20,000 on assets and a transfer to General Reserve of  ` 30,000. Goodwill amortised was ` 7,000, and gain on sale of machinery was  ` 3,000. Other information available is (changes in the value of Current Assets and Current Liabilities): trade receivables showed an increase of  ` 3,000; trade payables an increase of  ` 6,000; Prepaid expenses an increase of  ` 200; and outstanding expenses a decrease of  ` 2,000.
Ascertain Cash Flow from Operating Activities.

Answer:

Cash Flow Statement

 

Particulars

 (`)

 (`)

 

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

 

1,00,000

 

Items to be Added:

 

 

 

Transfer to General Reserve

 

30,000

 

Net profit Before tax

 

1,30,000

 

Items to be Added:

 

 

 

Depreciation

20,000

 

 

Goodwill amortised

7,000

 

 

 

30,000

 

 

Items to be Deducted:

 

 

 

Gain on sale of machinery

(3,000)

54,000

 

Operating Profit before Working Capital Adjustments

 

1,54,000

 

 Less: Increase in Current Assets

 

 

 

 

Prepaid Expenses

(200)

 

 

 

Trade Receivables

(3,000)

 

 

 Less: Decrease in Current Liabilities

 

 

 

Outstanding Expenses

(2,000)

 

 

 Add: Increase in Current Liabilities

 

 

 

  Trade Payables

6,000

800

 

Cash Generated from Operations

 

1,54,800

 

Question 16: From the following information, calculate Cash Flow from Operating Activities:

Particulars

31st March,

2022 (Rs.)

31st March, 2023 (Rs.)

Equity Share Capital

20,00,000

30,00,000

10% Preference Share Capital

2,00,000

1,00,000

Securities Premium

-

95,000

Surplus, i.e., Balance in Statement of Profit & Loss

4,00,000

8,00,000

10% Debentures

10,00,000

10,00,000

Additional Information:

(i) Preference shares were redeemed on 31st March, 2023 at a premium of 5%.

(ii) Dividend on equity shares was paid @ 8%.

(iii) Fresh issue of equity shares was made on 1st April 2022.

[Ans.: Cash Flow from Operating Activities =7,60,000.]

Answer:

Particulars

Rs.

Surplus, i.e., Balance in Statement of Profit & Loss     (4,00,000-8,00,000)

4,00,000

Add: Dividend on equity shares was paid @ 8% of 30,00,000

2,40,000

Dividend on 10% Preference Share Capital was paid (10% of 2,00,000)

 

Profit before Tax and extraordinary items

6,60,000

Less: Interest on 10% Debentures of

(10% of 10,00,000)

1,00,000

Cash Flow from Operating Activities

7,60,000

 

 

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – II

Chapter 4 – Cash Flow Statement

Question No. 1 To 4

Question No. 5 To 8

Question No. 9 To 12

Question No. 13 To 16

Question No. 17 To 20

Question No. 21 To 24

Question No. 25 To 28

Question No. 29 To 32

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