Question

Shri Ltd. was carrying on a business of packaging in Delhi and earned good profits in the past years. The company wanted to expand its business and required additional funds. To meet its requirements the company issued equity shares of * 30,00,000. It purchased a computerised machine of 20,00,000. It also purchased raw materials amounting to * 2,00,000. During the current year the net profit of the company was 15,00,000. Find out cash flow from operating activities from the above transactions. 31​

Answer 1

Answer: From the question only net profit is the thing which represents the operating activity , therefore Cash flow from operating activity is Rs 15,00,000/-

Explanation:

Cash Flow Statement

 Particulars Amount Amount

A Cash Flow From Operating Activities    

 Net Profit (Loss) Before Tax and extra ordinary items   1,500,000

  Add : Non cash expenses and non operating expenses    

 Provision for Income Tax 0  

 Loss on Sale of Fixed Asset 0  

 Depreciation  0  

 Goodwill Writtenoff 0 0

    Less : Non operating income    

          Profit on Sale of Fixed Assets 0 0

 Operating profit Before working capital changes   1,500,000

 Add : Decrease in Current Assets  0  

           Increase in Current Liabilities 0  

 Less : Increase in Current Assets 0  

           Decrease in Current Liabilities  0 0

 Cash Generated from operating activities   1,500,000

 Less : Income Tax Paid   0

 Cash Flow before extra ordinary items   1,500,000

 Add / less Extra ordinary items   0

 Net Cash Flow from operating activities   1,500,000

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