Question

From the following information, calculate Net Cash Flow from Operating Activities and Investing Activities.

Particulars	31st March, 2026 (₹)	31st March, 2025 (₹)
Surplus, i.e., Balance in Statement of Profit & Loss	4,00,000	1,00,000
Provision for Tax	30,000	30,000
Trade Payables	1,50,000	40,000
Current Assets (Inventories and Trade Receivables)	5,20,000	4,60,000
Property, Plant and Equipment (Fixed Assets)	9,70,000	7,50,000
Accumulated Depreciation	2,40,000	1,80,000

Additional Information:

1. Plant Costing ₹ 1,45,000 was sold at a loss of ₹ 40,000.
2. Depreciation amounting to ₹ 1,30,000 was provided during the current year.
3. Tax paid during the year was ₹ 30,000.

Answer 1

Accumulated Depreciation on Plant Sold: Opening Balance (₹ 1,80,000) + Current Year Depreciation (₹ 1,30,000) - Closing Balance (₹ 2,40,000) = ₹ 70,000

Sale Proceeds of Plant: Cost (₹ 1,45,000) - Accumulated Depreciation (₹ 70,000) - Loss on Sale (₹ 40,000) = ₹ 35,000

Purchase of Property, Plant, & Equipment: Closing Balance (₹ 9,70,000) + Cost of Plant Sold (₹ 1,45,000) - Opening Balance (₹ 7,50,000) = ₹ 3,65,000

Provision for Tax Made: Closing Provision (₹ 30,000) + Tax Paid (₹ 30,000) - Opening Provision (₹ 30,000) = ₹ 30,000

Cash Flow from Operating Activities

Particulars	Amount (₹)
Net Profit as per Surplus (₹ 4,00,000 - ₹ 1,00,000)	3,00,000
(+) Provision for Tax made during the year	30,000
Net Profit Before Tax and Extraordinary Items	3,30,000
(+) Depreciation charged during the year	1,30,000
(+) Loss on Sale of Plant	40,000
Operating Profit before Working Capital Changes	5,00,000
(+) Increase in Trade Payables (₹ 1,50,000 - ₹ 40,000)	1,10,000
(-) Increase in Current Assets (₹ 5,20,000 - ₹ 4,60,000)	(60,000)
Cash Generated from Operations	5,50,000
(-) Income Tax Paid	(30,000)
Net Cash Flow from Operating Activities	5,20,000

Cash Flow from Investing Activities

Particulars	Amount (₹)
Sale Proceeds from Plant (Inflow)	35,000
Purchase of Property, Plant, & Equipment (Outflow)	(3,65,000)
Net Cash Used in Investing Activities	(3,30,000)