Question

If manufacturing expenses are Rs. 20000, interest expenses Rs 4000. Cash sales is Rs 30000, Increase in inventory and debtors is Rs 5000 and Rs 7000 respectively. While increase in accounts payble is 9000. Calculate the cash flow from operations?
a) Rs 3000
b) Rs 9000
c) Rs 7000
d) Rs 12000

Answer 1

manufacturingmanufacturing expenses are Rs. 20000, interest expenses Rs 4000. Cash sales is Rs 30000, Increase in inventory and debtors is Rs 5000 and Rs 7000 respectively. While increase in accounts payble is 9000. Calculate the cash flow from operations?

a) Rs 3000

b) Rs 9000

c) Rs 7000

d) Rs 12000

Answer 2

Answer: Option (a) is correct.

Explanation:

Given that,

Manufacturing expenses = Rs. 20000

Interest expenses = Rs 4000

Cash sales = Rs 30000

Increase in inventory = Rs 5000

Increase in debtors = Rs 7000

Increase in accounts payable = Rs 9000

Cash flow:

= Cash sales + Increase in accounts payable - Manufacturing expenses - Interest expenses - Increase in inventory - Increase in debtors

= Rs 30,000 + Rs 9,000 - Rs. 20,000 - Rs 4,000 - Rs 5,000 - Rs 7,000

= Rs 3,000