Question 18 Chapter 5 of +2-B
18. Charles Ltd. earned a profit of 1,00,000 after charging depreciation of Rs 20,000 on assets and a transfer to General Reserve of Rs 30,000. Goodwill amortised was Rs 7,000, and gain on sale of machinery was Rs 3,000. Other information available is changes in the value of Current Assets and Current Liabilities: trade receivables showed an increase of Rs 3,000; trade payables an increase of Rs 6,000; Prepaid expenses an increase of Rs 200; and outstanding expenses a decrease of Rs 2,000.
Ascertain Cash Flow from Operating Activities.
The solution of Question 18 Chapter 4 of +2-B: –
Cash Flow From Operating Activities |
||
| Particulars |
Rs |
|
| Profit as per Statement of Profit and Loss | 1,00,000 | |
| Profit Before Tax and Extraordinary items | 1,00,000 | |
| Items to be Added: | ||
| Depreciation | 20,000 | |
| Goodwill amortised | 7,000 | |
| Transfer to General Reserve | 30,000 | 57,000 |
| Items to be Deducted: | ||
| Gain on sale of machinery | 3,000 | 3,000 |
| Operating Profit before Working Capital Adjustments | 1,54,000 | |
| Less: Increase in Current Assets | ||
| Prepaid Expenses | 200 | |
| Trade Receivables | 3,000 | |
| Add : Decrease in Current Assets | ||
| Outstanding Expenses | ||
| Add : Increase in Current Liabilities | 2,000 | |
| Trade Payables | 6,000 | 800 |
| Net Cash Flows from Operating Activities | 1,54,800 | |
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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