Accountancy, asked by archisha71541, 19 days ago

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

Answered by reenaverma071981
2

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

                                                                         ------------

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

                                                                    ------------------

                                                                  = 1,54,800

                                                                   ------------------                                                      

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