Question 12 Chapter 8 -Unimax Publication Class 12 Part 2

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

Table of Contents

12. Ramesh and Co. indicate a profit of 1,25,000 after considering the following:

(a) depreciation on building	₹ 25,000
(b) depreciation on plant and machinery	₹ 45,000
(c) amortization of goodwill	₹ 20,000
(d) gain on sale of machinery	₹ 10,000

The current assets and current liabilities at the beginning and at the end of the year are:

Ascertain the net cash flow from operating activities.

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

Calculation of cash flow from operating activities.

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		₹
Net profit as per profit & loss A/C		1,25,000
Add: non cash, non-operating expenses
Depreciation on building	25,000
Depreciation on plant and machinery	45,000
Amortization of goodwill	20,000	90,000
		2,15,000
Less: non-cash, non-operating
Gain on sale of machinery		(10,000)
Operating profit before Working capital charges		2,05,000
Add: increase in current liabilities
Accounts payable	2,000
Decrease in current assets
Stock	6,000	8,000
		2,13,000
Less: decrease in current liabilities
Expenses payable	(5,000)
Increase in current assets
Accounts receivable	(10,000)	(15,000)
Cash flow from operating activities		1,98,000

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What is the cash flow statement? why do we need to prepare?

Chapter No. 1 – Company Accounts (Share Capital)
Chapter No. 2 – Company Accounts (Issue of Debentures)
Chapter No. 3 – Company Accounts (Redemption of Debentures)
Chapter No. 4 – Financial Statements of a Company
Chapter No. 5 – Financial Statement Analysis
Chapter No. 6 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 7 – Ratio Analysis
Chapter No. 8 – Cash Flow Statement