Question 23 Chapter 15 of Class 12 Part – 2 – 2024

Question 23 Chapter 15 of Class 12 Part – 2 – 2024

Indirect Method

23. (Cash Flow from Operating Activities/Acc. Dep. on Plant Sold) Calculate cash fib from operating activities from the following :

	Opening ₹	Closing ₹
Surplus i.e. balance in Statement of Profit and Loss	30,000	35,000
General Reserve	10,000	15,000
Provision for depreciation on Plant	30,000	35,000
Outstanding expenses	5,000	3,000
Goodwill	20,000	10,000
Trade Receivable	40,000	35,000

An item of a plant costing ₹ 20,000 having book value ₹ 14,000 was sold for 18,000 during the year.

The solution of Question 23 Chapter 15 of Class 12 Part – 2 – 2024: -

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Cash Flow from Operating Activities

Particulars		Rs
Net Profit as per Statement of Profit and Loss		5,000
Add: Transfer to General Reserve		5,000
Net Profit before Income Tax		10,000
Add Non-Cash Items :
Depreciation on Plant*	11,000
Goodwill write off	10,000	21,000
		31,000
Less: Non-Operating income
Profit on sale of Plant		(4,000)
Operating Profit before the change in Working Capital		27,000
Add: Decrease in Current Assets & Increase in Current Liabilities
Trade Receivable		5,000
		32,000
Less: Decrease in Current Liabilities & Increase in Current Assets
Outstanding Expenses		(2,000)
Cash Flow from Operating activities		30,000

Working Note:

Particulars	Amount ₹	Particular	Amount ₹
To Plant A/c (20,000 - 14,000)	6,000	By Bal b/d	30,000
		By Profit & Loss A/c – Depreciation (Bal. fig.)	11,000
To Bal c/d	35,000
	41,000		41,000