Question 13:
Calculate
Cash Flow from Operating Activities from the following:
(i) Profit for 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 14:
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
15:
From the following information, calculate Cash Flow from Operating Activities:
|
Particulars |
31st March, 2024 (Rs.) |
31st March, 2025 (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, 2025 at a premium of 5%.
(ii) Dividend on equity shares was paid @ 8%.
(iii) Fresh issue of equity shares was made on 1st
April 2024.
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 on10% Debentures of (10% of 10,00,000) |
1,00,000 |
|
Cash
Flow from Operating Activities |
7,60,000 |
|
|
|
Question 16:
Grand
Hospitality Ltd., reported Net Profit after Tax of ₹ 6,40,000 for the year ended
31st March, 2025. The relevant extract from Balance Sheet as at 31st March, 2025
is:
|
|
|
|
|
Particulars |
31st March, 2025 (₹) |
31st March, 2024 (₹) |
|
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, 2025.
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 |
|
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Ts Grewal Solution 2025-2026
Class 12 / Volume – 3
Chapter 5 – Cash Flow Statements