Question

Calculate ‘Cash from operating activities’ from the following:

	31.3.2023 (₹)	31.3.2024 (₹)
Profit and Loss Balance	2,00,000	3,00,000
Trade Receivable	1,40,000	1,80,000
Provision for Depreciation	3,00,000	3,20,000
Outstanding Rent Payable	16,000	40,000
Prepaid Insurance	14,000	12,000
Goodwill	2,00,000	1,60,000
Inventories	1,40,000	1,80,000

Answer 1

Cash Flow from Operating Activities for the year ending 31st March, 2024.
Particulars		Amount (₹)
Profit for the year (3,00,000 − 2,00,000)		1,00,000
Adjustments for non-cash and non-operating items:
Add:
Provision for Depreciation (3,20,000 − 3,00,000)	20,000
Goodwill written off (2,00,000 − 1,60,000)	40,000	60,000
Operating Profit before Working Capital Changes		1,60,000
Less: Increase in Current Assets:
Trade Receivables (1,80,000 − 1,40,000)	(40,000)
Inventories (1,80,000 − 1,40,000)	(40,000)	(80,000)
Add:
Increase in Current Liabilities:
Outstanding Rent Payable (40,000 − 16,000)	24,000
Add:
Decrease in Current Assets:
Prepaid Insurance (12,000 − 14,000)	2,000	26,000
Net Cash from Operating Activities		1,06,000