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:
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|
|
|
|
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 |
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|
|
|
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:
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Cash Flow from Operating Activities |
||||
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Particulars |
(`) |
(`) |
|
|
|
Profit as per Statement of Profit and Loss |
|
6,40,000 |
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|
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Add: Provision for Tax |
|
20,000 |
|
|
|
Less:
Extraordinary Item |
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|
|
|
|
Insurance Claim |
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(50,000) |
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|
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Profit Before Tax and Extraordinary items |
|
6,10,000 |
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|
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Items to be Added: |
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|
|
|
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Depreciation on Plant and Machinery |
|
55,000 |
|
|
|
|
|
6,65,000 |
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|
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Items to be Deducted: |
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|
|
|
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Gain on Sale of Investments |
|
(20,000) |
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|
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Operating Profit before Working Capital Adjustments |
|
6,45,000 |
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|
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Add: Increase in Current Liabilities |
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|
|
|
|
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Trade Payables |
30,000 |
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|
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Add: Decrease in Current Assets |
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|
|
|
|
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Inventories |
10,000 |
40,000 |
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Less: Increase in Current Assets |
|
6,85,000 |
|
|
|
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Trade Receivables |
(40,000) |
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|
|
|
Prepaid Expenses |
(14,000) |
(54,000) |
|
|
Cash Generated from Operations (before tax and Extraordinary items) |
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6,31,000 |
|
|
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Less: Tax Paid |
|
(15,000) |
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|
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Cash Flow
from Operating Activities after Tax |
|
6,16,000 |
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|
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Add:
Extraordinary items |
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|
|
|
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Insurance Claim |
|
50,000 |
|
|
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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 (`) |
31st
March (`) |
|
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 |
|
|
|
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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 |
|
1,10,000 |
|
|
|
|
|
|
|
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 |
|
75,000 |
|
|
Net Cash Flows from Operating Activities |
|
10,10,000 |
Question 20:
Following information is related to
ABC Ltd.:
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STATEMMENT OF PROFIT AND LOSS |
||
|
Particulars |
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 |
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V. Profit
before Tax (III − IV) |
|
2,44,000 |
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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 |
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 |
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Ts Grewal Solution 2024-2025
Class 12 / Volume – 3
Chapter 4 – Cash Flow Statements