Question

Calculate Cash Flow from Operating Activities from the following information.

Particulars	₹
Net Profit (Difference between Closing and Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss)	8,00,000
Final Dividend paid in the year	1,10,000
Compensation for Natural Disaster credited to Statement of Profit and Loss	75,000
Depreciation	1,50,000
Loss on Sale of Investment	30,000
Gain (Profit) on Sale of Land	90,000
Provision for Tax	1,10,000
Dividend Received	20,000
Decrease in Current Assets (Other than Cash and Cash Equivalents)	40,000
Increase in Current Liablilities (Other than Bank Overdraft and Cash Credit)	70,000
Decrease in Current Liabilities (Other than Bank Overdraft and Cash Credit)	10,000
Increase in Current Assets (Other than Cash and Cash Equivalents)	60,000
Income Tax Refund	10,000
Income Tax Paid	1,20,000

Answer 1

Cash Flow from Operating Activities
Particulars	Amount (Rs)	Amount (Rs)
Profit as per Statement of Profit and Loss		8,00,000
Add: Provision for Tax		1,10,000
Add: Proposed Dividend Less: Income Tax Refund Less: Compensation for Natural Disaster		1,10,000 (10,000) (75,000)
Profit Before Tax and Extraordinary items		9,35,000
Items to be Added:
Depreciation on Plant and Machinery	1,50,000
Loss on sale of Investment	30,000	1,80,000
		11,15,000
Items to be Deducted:
Profit on Sale of Land	(90,000)
Dividend Received	(20,000)	(1,10,000)
Operating Profit before Working Capital Adjustments		10,05,000
Add: Increase in Current Liabilities	70,000
Add:Decrease in Current Assets	40,000	1,10,000
		11,15,000
Less: Decrease in Current Liabilities	(10,000)
Less: Increase in Current Assets	(60,000)	(70,000)
Cash Generated from Operations		10,45,000
Less: Tax Paid		(1,20,000)
Cash Flow from operations after Tax		9,25,000
Add: Compensation for Natural Disaster		75,000
Add: Income Tax Refund		10,000
Net Cash Flows from Operating Activities		10,10,000