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

Question 18 Chapter 5 of +2-B

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)

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

2 Book 3 min 225x300 - Question 18 Chapter 5 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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