Question 20 Chapter 5 of +2-B - T.S. Grewal 12 Class

Question 20 Chapter 5 of +2-B

Table of Contents

20. Calculate Cash Flow from Operating Activities from the following information:

INCOME STATEMENT (STATEMENT OF PROFIT AND LOSS) for the year ended 31st March, 2019
Particulars	Note No.	Rs
I. Revenue from Operations Sales		5,98,000
II. Other Income	1	19,500
III. Total Revenue I +II		6,17,500
IV. Expenses;
Cost of Materials Consumed		4,00,000
Change in Inventories of Finished Goods and Work-in-Progress	2	15,000
Employee Benefit Expenses		1,05,000
Depreciation and Amortisation Expenses		15,000
Other Expenses	3	20,000
Total Expenses		5,55,000
V. Profit before Tax III −IV		62,500
VI. Tax @ 30%		18,750
VII. Profit after Tax V −VI		43,750

Notes to Accounts

Particulars	Rs
1. Other Income
Rent	15,000
Gain Profit on Sale of Machinery	2,500
Interest on Debentures held as Investments	2,000
	19,500
2. Change in Inventories of Finished Goods and Work-in-Progress
(a) Finished Goods
Opening Inventories	37,500
Less: Closing Inventories	25,000
Sub-Total	12,500
b Work-in-Progress
Opening Inventories	22,500
Less: Closing Inventories	20,000
Sub-Total	2,500
Total a +b	15,000
3. Other Expenses
Office Expenses	12,500
Selling Expenses	6,000
Loss on Sale of Furniture	1,500
	20,000

Current Assets and Current Liabilities	As on 31st March,	As on 1st April,
	2019 (Rs)	2018 (Rs)
Trade Receivables	25,000	20,000
Trade Payables	32,500	35,000
Outstanding Expenses	8,000	5,000
Prepaid Expenses	5,000	3,500

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Cash Flow From for the year ended 31st March, 2019
Particulars		Rs
I. Cash Flow from Operating Activities
Profit as per Statement of Profit and Loss		43,750
Add: Provision for Tax		18,750
Profit Before Taxation		62,500
Items to be Added:
Depreciation and Amortization Expenses	15,000
Loss on Sale of Furniture	1,500
Items to be Deducted:
Profit on Sale of Machinery	2,500
Rent	15,000
Interest on Investment	2,000
Operating Profit before Working Capital Adjustments		59,500
Less: Increase in Current Assets
Trade Receivables	5,000
Prepaid Expenses	1,500
Add: Decrease in Current Liabilities
Trade Payables	2,500
Add: Increase in Current Liabilities
Outstanding Expenses	3,000
Add: Decrease in Current Assets
Inventories of Finished Goods and Work-in-Progress	15,000
Cash Generated from Operations		68,500
Less: Tax Paid		18,750
Net Cash Flows from Operating Activities		49,750