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Calculation Cash Flow from Operating Activities and Investing Activities: - Accountancy

Numerical

From the following information, calculation Cash Flow from Operating Activities and Investing Activities:

Particular

31st, March,

2018, (₹)

31st, March,

2019, (₹)

Surplus, i.e., Balance in Statement of Profit and Loss

2,50,000

10,00,000

Provision for Tax

75,000

75,000

Trade Payables

1,00,000

3,75,000

Current Assets (Trade Receivables and Inventories)

11,50,000

13,00,000

Fixed Assets (Tangible)

21,25,000

23,30,000

Accumulated Depreciation

10,62,500

11,00,000

Additional Information:
1. A machine having book value of ₹ 1,00,000 (Depreciation provided thereon ₹ 1,62,500) was sold at a loss of ₹ 20,000.
2. Tax paid during the year ₹ 75,000.

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Solution

Cash flow Statement 

for the year ended 31st March, 2019

Particulars

Amount
(₹)

Amount
(₹)

A. Cash Flow from Operating Activities

 

 

Net Profit as per Statement of Profit & Loss

7,50,000

 

Add: Provision for Tax made

75,000

 

Net Profit before Tax and Extraordinary Items

8,25,000

 

Add: Depreciation charged during the year

2,00,000

 

Add: Loss on Sale of Machine

20,000

 

Net Profit before working Capital changes

10,45,000

 

Add: Increase in Trade Payables

2,75,000

 

Less: Increase in Current Assets

(1,50,000)

 

Net Profit before Tax

11,70,000

 

Less: Tax Paid during the year

75,000

 

Cash Flow from Operating Activities

 

10,95,000

B. Cash flow from Investing Activities

 

 

Purchase of Fixed Asset

(4,67,500)

 

Sale of Machine

80,000

 

Cash used in Investing Activities

 

3,87,500

 

Dr.

Accumulated Depreciation A/c

Cr.

Date

Particulars

Amount

(₹)

Date

Particulars

Amount

(₹)

2019

 

 

2018

 

 

March 31

To Fixed Asset A/c
(Depreciation on Mach. Sold)

1,62,500

April 01

By Balance b/d

10,62,500

March 31

To balance c/d

11,00,000

 

By Statement of Profit & Loss A/c
(Bal. Fig.)

2,00,000

 

 

12,62,500

 

 

12,62,500

 

Dr.

Fixed Assets A/c

Cr.

Date

Particulars

Amount

(₹)

Date

Particulars

Amount

(₹)

2018

 

 

2019

 

 

April 01

To balance b/d

21,25,000

March 31

By Accumulated Depreciation A/c

1,62,500

2019

 

 

March 31

By Statement of Profit & Loss A/c- Loss

20,000

 

 

 

March 31

By Bank A/c (1,00,000 – 20,000)

80,000

March 31

To Cash/Bank A/c

4,67,500

March 31

By balance c/d

23,30,000

 

 

25,92,500

 

 

25,92,500

Concept: Preparation of Cash Flow Statement
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APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 4 Cash Flow Statement
Exercise | Q 36 | Page 101
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