Question

(a) If credit purchase are Rs. 3,00,000 and Cash Purchase are 25% of Total Purchase,
find out cash flow from operating activities
(b) The second​

Answer 1

Answer:

The cash flow from operating activities is 666,667

Explanation:

Data provided in the question

Credit purchase = 2000000

Cash purchase = 25% of the total purchase

And we know that

Total purchase = Credit purchase + cash purchase

100% = 75% + 25%

Since the cash purchase percentage is given and the credit purchase is also given.

So, we can easily find out the cash purchase amount that is to be reported in the operating activities equal to

= 2000000 × 25% ÷ 75%

= 666,667

The same amount is reflected in the cash flow from operating activities with a negative sign.