Question 13:
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 14:
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 15: From the following information, calculate Cash Flow from Operating Activities:
|
Particulars |
31st March, 2025 (Rs.) |
31st March, 2026 (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, 2026 at a premium of 5%.
(ii) Dividend on equity shares was paid @ 8%.
(iii) Fresh issue of equity shares was made on 1st April 2025.
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, 2026. The relevant extract from Balance Sheet as at 31st March, 2026 is:
|
|
|
|
|
Particulars |
31st March, 2026 (₹) |
31st March, 2025 (₹) |
|
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, 2026. 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 |
|
Click below for more Questions
Ts Grewal Solution 2026-2027
Class 12 / Volume – 3
Chapter 5 – Cash Flow Statements
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
Question No. 33 To 36
Question No. 37 To 40
Question No. 41 To 44
Question No. 45 To 48
Question No. 49 To 52