Question

Calculate ‘Cash from Operating activities’ from the following figures:

	31.3.2022 (₹)	31.3.2023 (₹)
Profit and Loss Balance	60,000	65,000
Trade Receivables	1,49,000	1,53,000
General Reserve	2,02,000	2,37,000
Salary Outstanding	30,000	12,000
Wages Prepaid	5,000	7,000
Goodwill	80,000	70,000
Cash and Bank Balance	40,000	30,000

Hint: Cash and Bank Balance will not affect Cash Flow from Operating Activities.

Answer 1

Cash Flow from Operating Activities for the year ending 31st March, 2023.
Particulars		Amount (₹)
Profit for the year (P&L change: 65,000 − 60,000)		5,000
Adjustments for non-cash and non-operating items:
Add:
Transfer to General Reserve (2,37,000 − 2,02,000)	35,000
Goodwill written off (80,000 − 70,000)	10,000	45,000
Operating Profit before Working Capital Changes		50,000
Changes in Working Capital
Less:
Increase in Trade Receivables (1,53,000 − 1,49,000)	(4,000)
Decrease in Salary Outstanding (12,000 − 30,000)	(18,000)
Increase in Wages Prepaid (7,000 − 5,000)	(2,000)
Net Adjustment for Working Capital		(24,000)
Net Cash from Operating Activities		26,000