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12th | Cash Flow Statement | Question No. 17 To 20 | Ts Grewal Solution 2023-2024

Question 17:

Grand Hospitality Ltd., reported Net Profit after Tax of  ` 6,40,000 for the year ended 31st March, 2023. The relevant extract from Balance Sheet as at 31st March, 2023 is:

 

 

 

Particulars

31st March, 2023

(`)

31st March, 2022

(`)

Inventories

1,15,000

1,25,000

Trade Receivables

1,50,000

1,10,000

Prepaid Expenses

20,000

6,000

Trade Payables

1,10,000

80,000

Provision for Tax

20,000

15,000

 

 

 

 

Depreciation charged on Plant and Machinery  ` 55,000, insurance claim received  ` 50,000, gain (profit) on sale of investment  ` 20,000 appeared in the Statement of Profit and Loss for the year ended 31st March, 2023. Calculate Cash Flow from Operating Activities.

Answer:

Cash Flow from Operating Activities

 

Particulars

 (`)

 (`)

 

Profit as per Statement of Profit and Loss

 

6,40,000

 

Add: Provision for Tax

 

20,000

 

Less: Extraordinary Item

 

 

 

Insurance Claim

 

(50,000)

 

Profit Before Tax and Extraordinary items

 

6,10,000

 

Items to be Added:

 

 

 

Depreciation on Plant and Machinery

 

55,000

 

 

 

6,65,000

 

Items to be Deducted:

 

 

 

Gain on Sale of Investments

 

(20,000)

 

Operating Profit before Working Capital Adjustments

 

6,45,000

 

Add: Increase in Current Liabilities

 

 

 

 

 Trade Payables

30,000

 

 

Add: Decrease in Current Assets

 

 

 

 

Inventories

10,000

40,000

 

Less: Increase in Current Assets

 

6,85,000

 

 

 Trade Receivables

(40,000)

 

 

 

 Prepaid Expenses

(14,000)

(54,000)

 

Cash Generated from Operations (before tax and Extraordinary items)

 

6,31,000

 

Less: Tax Paid

 

(15,000)

 

Cash Flow from Operating Activities after Tax

 

6,16,000

 

Add: Extraordinary items

 

 

 

Insurance Claim

 

50,000

 

Net Cash Flows from Operating Activities

 

6,66,000

 

Question 18:

Compute Cash Flow from Operating Activities from the following:
(i) Profit for the year ended 31st March, 2023 is  ` 10,000 after providing for depreciation of  ` 2,000.
(ii) Current Assets and Current Liabilities of the business for the year ended 31st March, 2022 and 2023 are as follows:
 

Particular

31st March
2022

(`)

31st March
2023

(`)

Trade Receivables

14,000

15,000

Provision for Doubtful Debts

1,000

1,200

Trade Payables

13,000

15,000

Inventories

5,000

8,000

Other Current Assets

10,000

12,000

Expenses Payables

1,000

1,500

Prepaid Expenses

2,000

1,000

Accrued Income

3,000

4,000

Income Received in Advance

2,000

1,000

Answer:

Cash Flow Statement

 

Particulars

 (`)

 (`)

 

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

 

10,000

 

Items to be Added:

 

 

 

Depreciation

2,000

2,000

 

Operating Profit before Working Capital Adjustments

 

12,000

 

 Less: Increase in Current Assets

 

 

 

  Accrued Income

(1,000)

 

 

  Inventories

(3,000)

 

 

  Other Current Assets

(2,000)

 

 

  Trade Receivables

(1,000)

 

 

 Less: Decrease in Current Liabilities

 

 

 

  Income Received in Advance

(1,000)

 

 

 Add: Increase in Current Liabilities

 

 

 

Expenses Payable

500

 

 

Provision for Doubtful Debts

200

 

 

  Trade Payables

2,000

 

 

 Add: Decrease in Current Assets

 

 

 

  Prepaid Expenses

1,000

(4,300)

 

Cash Generated from Operations

 

7,700

 

Question 19:

Calculate Cash Flow from Operating Activities from the following information.

Particular

 (`)

Net Profit (Difference between Closing and Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss)

8,00,000

Final Dividend paid in the year

1,10,000

Compensation for Natural Disaster credited to Statement of Profit and Loss

75,000

Depreciation

1,50,000

Loss on Sale of Investment

30,000

Gain (Profit) on Sale of Land

90,000

Provision for Tax

1,10,000

Dividend Received

20,000

Decrease in Current Assets (Other than Cash and Cash Equivalents)

40,000

Increase in Current Liabilities

70,000

Decrease in Current Liabilities

10,000

Increase in Current Assets (Other than Cash and Cash Equivalents)

60,000

Income Tax Refund

10,000

Income Tax Paid

1,20,000

Answer:

Cash Flow from Operating Activities

 

Particulars

 (`)

 (`)

 

Profit as per Statement of Profit and Loss

 

8,00,000

 

Add: Provision for Tax

 

1,10,000

 

Add: Proposed Dividend
Less: Income Tax Refund
Less: Compensation for Natural Disaster

 

1,10,000
  (10,000)
  (75,000)

 

 

 

 

 

Profit Before Tax and Extraordinary items

 

 9,35,000

 

Items to be Added:

 

 

 

Depreciation on Plant and Machinery

1,50,000

 

 

Loss on sale of Investment

30,000

 1,80,000

 

 

 

11,15,000

 

Items to be Deducted:

 

 

 

Profit on Sale of Land

(90,000)

 

 

Dividend Received

(20,000)

(1,10,000)

 

Operating Profit before Working Capital Adjustments

 

10,05,000

 

Add: Increase in Current Liabilities

70,000

 

 

Add: Decrease in Current Assets

40,000

  1,10,000

 

 

 

11,15,000

 

Less: Decrease in Current Liabilities

(10,000)

 

 

Less: Increase in Current Assets

(60,000)

  (70,000)

 

Cash Generated from Operations

 

10,45,000

 

Less: Tax Paid

 

(1,20,000)

 

Cash Flow from operations after Tax

 

 9,25,000

 

Add: Compensation for Natural Disaster
Add: Income Tax Refund
 

 

  75,000
  10,000
 

 

Net Cash Flows from Operating Activities

 

10,10,000

 

Question 20:

Following information is related to ABC Ltd.:
 

STATEMMENT OF PROFIT AND LOSS
for the year ended 31st March, 2023

Particulars ulars

Note No.

(`)

I. Revenue from Operations (Net Sales)

 

30,00,000

II. Other Income

1

45,000

III. Total Revenue (I + II)

 

30,45,000

IV. Expenses;

 

 

(a) Purchases of Stock-in-Trade

 

23,03,000

(b) Change in Inventories of Stock-in-Trade

2

(16,000)

(c) Depreciation and Amortisation Expenses

 

1,85,000

(d) Other Expenses

3

3,29,000

Total Expenses

 

28,01,000

V. Profit before Tax (III − IV)

 

2,44,000

VI. Less: Provision for Tax

 

64,000

VII. Profit after Tax (V – VI)

 

1,80,000

 

 

 

Notes to Accounts

Particulars

 `

1. Other Income

 

(a) Dividend Received

5,000

(b) Gain (Profit) on Sale of Plant

40,000

 

45,000

2. Change in Inventories of Stock-in-Trade

 

Opening Inventories

2,84,000

Less: Closing Inventories

3,00,000

 

(16,000)

3. Other Expenses

 

(a) Office Expenses

58,000

(b) Selling Expenses

2,35,000

(c) Loss on Sale of Assets

36,000

 

3,29,000

 

 

 

Other Information:

Balance as on
31st March, 2023 (
`)

Balance as on

31st March, 2022 (`)

Trade Payables

2,78,000

2,50,000

Trade Receivables

4,52,000

4,15,000

Inventories

3,00,000

2,84,000

Office Expenses Outstanding

...

5,000

Selling Expenses Outstanding

25,000

22,000


Calculate Cash Flow from Operating Activities.

Answer:

Cash Flow from Operating Activities

 

Particulars

 (`)

 (`)

 

Profit as per Statement of Profit and Loss

 

1,80,000

 

Add: Tax Expense

 

64,000

 

Profit Before Taxation

 

2,44,000

 

Items to be Added:

 

 

 

Loss on Sale of Assets

36,000

 

 

Depreciation and Amortisation Expenses

1,85,000

2,21,000

 

 

 

4,65,000

 

Items to be Deducted:

 

 

 

Dividend Received

(5,000)

 

 

Profit on Sale of Plant

(40,000)

(45,000)

 

Operating Profit before Working Capital Adjustments

 

4,20,000

 

Less: Decrease in Current Liabilities

 

 

 

Office Expenses Outstanding

 

(5,000)

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

28,000

 

 

Selling Expenses Outstanding

3,000

31,000

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(37,000)

 

 

  Inventories

(16,000)

(53,000)

 

Cash Generated from Operations

 

3,93,000

 

Less: Tax Paid

 

(64,000)

 

Net Cash Flows from Operating Activities

 

3,29,000

 

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – II

Chapter 4 – Cash Flow Statement

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Question No. 9 To 12

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Question No. 17 To 20

Question No. 21 To 24

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