Question 32 Chapter 5 of +2-B - USHA Publication 12 Class

Question 32 Chapter 5 of +2-B

Indirect Method

32. (Cash Flow from Operating Activities) With the help of the balance sheets and profit and loss account of AB Ltd. calculate the cash flow from operating activities.

Balance Sheet of AB LTD.

Particulars	31st March, 2018	31st March, 2017
I. Equity and Liabilities
Shareholders Fund :
Share Capital	2,93,000	2,20,000
Reserves and Surplus :
General Reserve	96,000	60,000
Non-Current Liabilities :
Long-term Borrowings
Loan	1,05,000	1,20,000
Current Liabilities :
Trade Payable	65,000	80,000
Total	5,59,000	4,80,000
II. Assets
Non-Current Assets :
Tangible Assets
Plant	3,30,000	3,20,000
Accumulated depreciation	-38,000	-30,000
Intangible Assets :
Patents	58,000	-
Current Assets
Inventories	1,20,000	1,00,000
Trade Receivable	67,000	70,000
Cash and Cash Equivalents :
Cash	22,000	20,000
Total	5,59,000	4,80,000

 

I	Revenue from Operations (Net)
	(Sales)	3,90,000
II	Other Incomes	-
III	Total Revenue (I + II)	3,90,000
IV	Expenses :
	Depreciation and amortization expenses :
	Depreciation	8,000
	Other Expenses :
	Salary	55,000
	Rent	79,000
	Commission	27,000
	Other business expenses	1,60,000
	Total Expenses	3,29,000
V	Profit before exceptional and extraordinary items and tax	61,000
VI	Exceptional Items
VII	Extraordinary items
	Proposed dividend for the previous year	25,000
	Retained earnings	36,000

 

The solution of Question 32 Chapter 5 of +2-B: - 

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Cash Flow from Operating Activities

Particulars		Rs
Net Profit as per Income Statement		36,000
Add Non-Cash and Non-Operating items :
Depreciation Charged	8,000
Proposed dividend for the previous year	25,000	33,000
Cash from operating activities before change in working capital		69,000
Add: Decrease in Current Assets :
Debtors		3,000
		72,000
Less: Increase in Current Assets
Inventories	20,000
Less: Decrease in Current Liabilities
Creditors	15,000	35,000
Cash Flow from Operating activities		37,000