Question 10 Chapter 8 -Unimax Publication Class 12 Part 2

Question 10 Chapter 8 – Unimax Publication Class 12 Part 2 – 2021

Table of Contents

The solution of Question 10 Chapter 8 – Unimax Publication Class 12 Part 2-2021 : –

Unimax Publication – Accountancy PSEB Class 12 – Volume I – Solution

Unimax Publication – Accountancy PSEB (Class 12) – Part – II – Solution

10.X Ltd. made a profit of 1,00,000 after charging depreciation of 20.000 on assets and a transfer to General reserve of 30,000. The goodwill written of was 7,000 and the gain on sale of machinery was 3,000. The other information available to you (changes in the value of current assets and current Liabilities) is as follow:
At the end of the year debtors showed an increase of 6,000; creditors an increase of 10,000; prepaid expenses an increase of 200; bills receivable a decrease of 3,000; bills payable a decrease of 4,000; outstanding expenses a decrease of 2,000. Ascertain the cash flow from the operating activities.

The solution of Question 10 Chapter 8 – Unimax Publication Class 12 Part 2-2021 : –

Calculation of cash flow from operating activities.

		₹
Profit as per profit and loss a/c		1,00,000
Non-cash, non -operating expenses
Add: transfer to general reserve		30,000
Depreciation	20,000
Goodwill Written off	7,000	27,000
		1,57,000
Less: non-operating income
Gain on sale of machinery		(3,000)
Operating profit before working capital charges		1,54,000
Add: increase in current liabilities
Creditors	10,000
Decrease in current liabilities
Bills receivable	3,000	13,000
		1,67,000
Less: decrease in current liabilities
Decrease in bills payable	(4,000)
Decrease in outstanding expenses	(2,000)
Increase in current assets
Increase in debtors	(6,000)
Increase in prepaid expenses	(200)	(12,200)
Cash from operating activities		1,54,800