Question 21 Chapter 5 of +2-B - USHA Publication 12 Class

Question 21 Chapter 5 of +2-B

Indirect Method

21. (Cash Flow from Operating Activities/Proposed dividend for Previous Year) From the following statement calculate cash generated from operating activities :

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDING 31ST MARCH, 2018
Particular	₹	₹
Revenue earned-Gross Profit		85,000
Add: Other Incomes
Profit on sale of machinery	5,000
Dividend received	3,000
Commission accrued	4,000
Income tax refund	6,000	18,000
Total Income		1,03,000
Less : Expenses incurred to earn revenue
Salaries	10,000
Rent	5,000
Depreciation	20,000
Loss on sale of Building	5,000
Goodwill amortized	8,000
Proposed dividend for the previous year	10,000
Provision for Income tax	21,000	79,000
Net Profit		24,000

The solution of Question 21 Chapter 5 of +2-B: –

Cash Flow from Operating Activities
Particulars		Rs
Net Profit as per Statement of Profit and Loss		24,000
Add Non-operating items :
Proposed dividend for the previous year	10,000
Provision for taxation	15,000	25,000
		49,000
Add Non-Cash Items :
Depreciation	20,000
Loss on sale of the building	5,000
Goodwill amortized	8,000	33,000
Less: Non-Operating Incomes:
Profit on sale of machinery	5,000
Dividend received	3,000
Commission Accrued	4,000	(12,000)
Cash generated from Operating Activities		70,000
Less: Tax Paid		(15,000)
Cash Flow from Operating activities		55,000