Question 14 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 14 Chapter 5 of +2-B

Table of Contents

The solution of Question 14 Chapter 4 of +2-B: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

14. Grand Hospitality Ltd., reported Net Profit after Tax of Rs 6,40,000 for the year ended 31st March, 2019. The relevant extract from Balance Sheet as at 31st March, 2019 is:

Particulars	31st March,2019 (Rs)	31st March, 2018 (Rs)
Inventories	1,15,000	1,25,000
Trade Receivables	1,50,000	1,10,000
Prepaid Expenses	20,000	6,000
Trade Payables	1,10,000	80,000
Provision for Tax	20,000	15,000

Depreciation charged on Plant and Machinery Rs 55,000, insurance claim received Rs 50,000, gain profit on sale of investment Rs 20,000 appeared in the Statement of Profit and Loss for the year ended 31st March, 2019. Calculate Cash Flow from Operating Activities

The solution of Question 14 Chapter 4 of +2-B: –

Cash Flow From Operating Activities
Particulars		Rs
Profit as per Statement of Profit and Loss		6,40,000
Add: Provision for Tax		20,000
Less : Extraordinary Item
Insurance Claim		50,000
Profit Before Tax and Extraordinary items		6,10,000
Add: Depreciation on Plant and Machinery		55,000
		6,65,000
Add: Gain on Sale of Investments		20,000
Operating Profit before Working Capital Adjustments		6,45,000
Add: Trade Payables	30,000
Add: Inventories	10,000	40,000
		6,85,000
Add: Trade Receivables	40,000
Add: Prepaid Expenses	14,000	54,000
Cash Generated from Operations before tax and Extraordinary items		6,31,000
Less: Tax Paid		15,000
Cash Flow from Operating Activities after Tax		6,16,000
Insurance Claim		50,000
Net Cash Flows from Operating Activities		50,000