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Answers
Cash flow from operating activities
Net profit before tax and extra ordinary items
- 1,00,000
Add :- non cash and non operating expenses
Goodwill written off - - - - - 72000
Depreciation on machinery - - - - - 66,000 W.N 2
loss on sale of machinery - - - - - 2000
Add - 1,00,000 +72000+66000+2000 = 2,40,000.
Less - increase in current asset and decrease in current liabilities
Trade receivable - - - - - 27,000
Inventories - - - - - - 8000
Trade payable - - - - - 25,000
Short term provisions - - - -27,000 total 87000
Cash Flow from operating expenses (2,40000 + 87000) = 1,53,000.
Cash flow from investing activities
Purchase of machinery w. N 1 - - - - (2,94,000)
Sale of machinery - - - - - - - - 6,0000
Cash used in investing activities - - - - (288000).
Cash flow from financing activities
Issue of share capital - - - - - - 1,00,000
Money raised from borrowings - - - - 70,000
Cash flow from financing activities - - - /1,70,000
Net increase icash or cash equivalentn 35,000
(2,40,0000 + 87,000 - 288000+170000)
Opening balance of cash or cash equivalent
Current investment - - - - - - 1,50,000
Cash and cash equivalent - - - - 375000
Add (150000 + 375000) = 5,60,000
Closing balance of caah or cash equivalent
Current investment - - - 2,40000
Cash and cash equivalent - - - - 3,20,000
Add (2,40,000 +3,20,000) = 5,60,000.
W.N
Machinery account
Dr.
To balance b/d - - - - 10,00,0000
To bank account purchase (B/f) - - - 2, 94,000.
Cr.
By bank sale - - - 6000
By accumulated Depreciation - - - - 16,000
By loss on sale - - - - 2000
By balance c/d - - - 12,70,000
Total - - - 12,94,000.
Accumulated Depreciation account
Dr.
To machinery account - - - - 16,000
To balance c/d - - - - 2,00,000.
Cr.
By balance b/d---- 1,50,000
By Depreciation (b/f) - - - - 66,000
Total - - - - - - - 2,16,000.
Thanks.