Question 13:
Compute Cash Flow from Operating Activities from the following information:
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|
|
|
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 |
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|
|
Answer:
|
Cash Flow from Operating Activities |
|||
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|
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: |
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|
|
|
Income Tax Refund |
(30,000) |
|
|
|
Gain on Sale of Land |
(70,000) |
(1,00,000) |
|
|
Operating Profit before Working Capital Changes |
|
2,75,000 |
|
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Less: Net Tax Paid (45,000 – 30,000) |
|
(15,000) |
|
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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:
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|
|
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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
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|
|
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Particulars |
Closing Balance (`) |
Opening Balance (`) |
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Trade Payables |
50,000 |
75,000 |
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Trade Receivables |
75,000 |
60,000 |
|
Prepaid Expenses |
10,000 |
18,000 |
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|
|
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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 |
|
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Add: Prepaid Expenses |
|
8,000 |
|
|
|
|
7,38,000 |
|
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Less: Trade payable |
(25,000) |
|
|
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Less: Trade receivable |
(15,000) |
(40,000) |
|
|
Net Cash Flows from Operating Activities |
|
6,98,000 |
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|
|
|
|
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: |
|
|
|
|
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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 |
|
|
|
|
|
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Prepaid Expenses |
(200) |
|
|
|
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Trade Receivables |
(3,000) |
|
|
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Less: Decrease in Current Liabilities |
|
|
|
|
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Outstanding
Expenses |
(2,000) |
|
|
|
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Add: Increase in Current Liabilities |
|
|
|
|
|
Trade Payables |
6,000 |
800 |
|
|
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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.
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 |
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Ts Grewal Solution 2024-2025
Class 12 / Volume – 3
Chapter 4 – Cash Flow Statements