Question No 11 Chapter 8 – UNIMAX Class 12 Part 2 – 2021

Question No 11 Chapter 8 – UNIMAX Class 12 Part 2 – 2021

11.calculate cash from operating activities.

(I) profits made during the year 2,50,000 after considering the following item:
(a) depreciation on fixed assets 10,000
(b) amortization of goodwill 5,000
(c) Transfer to general reserve 7,000
(d) profit on sale of land 3,000
(ii) The following is the position of current assets and current liabilities:

Particulars	2021 (₹)	2022 (₹)
Debtors	15,000	12,000
Creditors	10,000	15,000
Bills receivable	8,000	10,000
Prepaid expenses	4,000	6,000

The solution of Question No 11 Chapter 8 – UNIMAX Class 12 Part 2 – 2021: -

Calculation of cash flow from operating activities.

		₹
Net profit as per P & L A/c		2,50,000
Non-cash, non-operating Expenses
Add: transfer to general reserve		7,000
Depreciation	10,000
Amortization of goodwill	5,000	15,000
Less: non-cash ,non-operating income		2,72,000
Profit on sale of land
Operating profit before working capital charges		(3,000)
Add: decrease in current assets		2,69,000
Increase in current liabilities
Increase in creditors	5000
Decrease in debtors	3000	8,000
Less: decrease in current liabilities
Increase in current assets
Increase in B/R	(2000)
Increase in prepaid Exp.	(2000)	(4000)
Cash from operating activities		2,73,000