Charles Ltd., made a profit of Rs 1,00,000 after charging depreciation of Rs 20,000 on assets and a transfer to general reserve of Rs 30,000. The goodwill amortised was Rs 7,000 and gain on sale of machinery was Rs 3,000. Other information available to you ( changes in the value of current assets and current liabilities) are trade receivables showed an increase of Rs 3,000, trade payables an increase of Rs 6,000, prepaid expenses an increase of Rs 200, and outstanding expenses a decrease of Rs 2,000. Ascertain cash flow from operating activities.
Answers
Answer:
Cash Generated from operations = 1,54,800
Explanation:
Cash flow from operations:
Profit as per Statement of profit and loss = 1,00,000
Items to be added
Depreciation = 20,000
Goodwill Amortized = 7,000
Transfer to General Reserve = 30,000
--------- 57,000
Less: Items to be Deducted
Gain on sale of machinery 3,000
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Oeprating profit before working capital
Adjustment = 1,54,000
Less increase in Current Assets
i. Prepaid Expenses 200
ii. Trade Receivable 3,000
Less: Decrease in Current Liability
Outstanding Expenses 2,000
Add: Increase in Current Liability
Trade Payables 6,000
------------ = 800
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= 1,54,800
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