Question

1. Calculate Cash flow from operating activities from the following
31.3.2010 31.3.2011
₹ ₹
Profit and Loss Appropriation balance
20,000 30,000
Trade Receivable
14,000 18,000
Provision for Depreciation
30,000 32,0000
Outstanding Rent Payable
16,000 4,000
Prepaid Insurance
1,400 1,200
Goodwill
20,000 16,000
Inventories
14,000 18,000​

Answer 1

Explanation:

A. net profit before tax Nd extraordinary items 10000

B. Add items to be added

depreciation 2000

goodwill written off 4000

C. less item to be deducted (blank)

D. profit before working capital change 16000

E.Add decrease in current asset or increase in current liabilities

decrease in trade receivable 4000

decrease in prepaid insurance 200

F. less increase in current asset or decrease in current liabilities

increase in inventories (4000)

decrease in outstanding rent (12000)

G.Cash generated from operation 4200