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Question 14 Chapter 5 of +2-B
14. Grand Hospitality Ltd., reported Net Profit after Tax of Rs 6,40,000 for the year ended 31st March, 2019. The relevant extract from Balance Sheet as at 31st March, 2019 is:
| Particulars | 31st March,2019 (Rs) | 31st March, 2018 (Rs) |
| 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 Rs 55,000, insurance claim received Rs 50,000, gain profit on sale of investment Rs 20,000 appeared in the Statement of Profit and Loss for the year ended 31st March, 2019. Calculate Cash Flow from Operating Activities
Cash Flow From Operating Activities
| Particulars |
Rs |
|
|---|---|---|
| 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 | |
| Add: Depreciation on Plant and Machinery | 55,000 | |
| 6,65,000 | ||
| Add: Gain on Sale of Investments | 20,000 | |
| Operating Profit before Working Capital Adjustments | 6,45,000 | |
| Add: Trade Payables | 30,000 | |
| Add: Inventories | 10,000 | 40,000 |
| 6,85,000 | ||
| Add: Trade Receivables | 40,000 | |
| Add: 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 | |
| Insurance Claim | 50,000 | |
| Net Cash Flows from Operating Activities | 50,000 | |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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