Question 18 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 18 Chapter 5 of +2-B

Table of Contents

The solution of Question 18 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)

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

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