Question

If credit sale are Rs5 lakh and cash sale are 20% of total sale. Find out cash flow from cash sale by operating activities

Answer 1

let total sales =Rs. 100

cash sales=(Rs. 20)

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credit sales=Rs. 80

So,

=5,00,000 × 100/80

=Rs. 625000

Answer 2

Cash inflow from operating activity = 1,25,000

Explanation:

Credit Sales = 5,00,000

Cash Sales = 20%

Credit sales = 100% (Total sales) - 20% ( Cash sales )

= 80% (Credit sales)

Computation of Total Sales :

Total sales =  Credit sales x (100 / 80)

= 5,00,000 x (100 / 80)

= 6,25,000

Net Cash sales = Net Total Sales - Net Credit Sales

= 6,25,000 - 5,00,000

= 1,25,000

Cash inflow from operating activity = 1,25,000  

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