Question 23 Chapter 5 of +2-B – USHA Publication 12 Class

Question 23 Chapter 5 of +2-B

Question 23 Chapter 5 of +2-B

Indirect Method

23. (Cash Flow from Operating Activities/Acc. Dep. on Plant Sold) Calculate cash fib from operating activities from the following :

  Opening ₹ Closing ₹
Surplus i.e. balance in Statement of Profit and Loss  30,000 35,000
General Reserve  10,000 15,000
Provision for depreciation on Plant  30,000 35,000
Outstanding expenses  5,000 3,000
Goodwill  20,000 10,000
Trade Receivable  40,000 35,000

An item of a plant costing ₹ 20,000 having book value ₹ 14,000 was sold for 18,000 during the year.

 

The solution of Question 23 Chapter 5 of +2-B: – 


Cash Flow from Operating Activities
Particulars
Rs
Net Profit as per Statement of Profit and Loss   5,000
Add: Transfer to General Reserve   5,000
Net Profit before Income Tax   10,000
Add Non-Cash Items :    
Depreciation on Plant* 11,000  
Goodwill wrote off 10,000 21,000
    31,000
Less: Non-Operating income    
Profit on sale of Plant   (4,000)
Operating Profit before the change in Working Capital   27,000
Add: Decrease in Current Asserts    
Sundry Debtors   5,000
    32,000
Less: Decrease in Current Liabilities    
Outstanding Expenses   (2,000)
Cash Flow from Operating activities   30,000

Working Note:

Particulars
Amount ₹
Particular Amount ₹
    By Bal b/d 30,000
    By Profit & Loss A/c – Depreciation (Bal. fig.) 5,000
To Bal c/d 35,000    
  35,000   35,000
Increase in Depreciation Provision = 5,000
Add : Depreciation on Plant (₹ 20,000 – ₹ 14,000) = 6,000
Total Depreciation = 11,000



Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

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T.S. Grewal’s Analysis of Financial Statement

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