1. The net profit before taxes as per the profit and loss account, of Gaman Ltd is Rs 269244. With the given set of information, classify the given items as operating investing/financing), share the correct classification with logical reasoning And calculate the cash flow from operating activities TABLE given below :- Loss on sale of asset 95780 dividend income 26000 interest income 35000 12000 finance cost paid on debentures gain on sale of investment Depreciation on fixed assets 45000 5000 Amortisation Expenses 110000 (10 Marks)
Answers
Answer:
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Given:
The net profit before taxes as per the profit and loss account, of Gaman Ltd is Rs269244. With the given set of information, classify the given items as operating investing/financing), share the correct classification with logical reasoning
To Find:
calculate the cash flow from operating activities TABLE given below :-
Loss on sale of asset 95780
dividend income 26000
interest income 35000
finance cost paid on debentures 12000
gain on sale of investment 45000
Depreciation on fixed assets 5000
Amortisation Expenses 110000
Solution:
The classification of items are as,
Loss on sale of asset- Investing
dividend income- Investing
interest income- Investing
finance cost paid on debentures- Financing
gain on sale of investment- Investing
Depreciation on fixed assets- Investing
Amortisation Expenses- Investing
Now calculating the cash flow from the given activities,
Cash flow statement
In the books of Gaman Ltd
CASH FLOW FROM OPERATING ACTIVITIES
Net profit before taxes and extraordinary items 269244
adjustment for non cash items
Add: Amortisation expense 110000
Add: Depreciation on fixed assets 5000
adjustment for non operating items
Add: loss on sale of asset 95780
Less: dividend income 26000
Less: interest income 35000
Less: gain on sale of investment 45000
Add: finance cost paid on debentures 12000
Cash flow from operating activity 386024