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Cash from operating activities before tax will be ₹ ______. -

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Question

Read the following information and answer the given question:

Krishika alumni of IIM Ahemdabad initiated her startup Krishika Ltd. in 2018. The profits of Krishika Ltd. in the year 2019-20 after all appropriations was ₹ 31,25,000. This profit was arrived after taking into consideration the following items:

S. No. Particulars Amount (₹)
1. Gain on sale of fixed tangible assets 12,50,000
2. Goodwill written off 7,80,000
3. Transfer to General Reserve 8,75,000
4. Provision for taxation 4,37,500

Additional information:

Particulars 31.3.2020 (₹) 31.3.2019 (₹)
Prepaid Expenses 7,50,000 5,00,000
Inventory 10,50,000 8,20,000
Trade Payable 4,50,000 3,50,000
Trade Receivables 6,20,000 5,90,000

Cash from operating activities before tax will be ₹ ______.

Options

  • 35,57,500

  • 40,67,500

  • 37,87,500

  • 35,67,300

MCQ
Fill in the Blanks

Solution

Cash from operating activities before tax will be ₹ 35,57,500.

Explanation:

Cash from Operating Activities before tax = Operating profit before Working Capital changes - increase in Current Assets + Increase in Current liabilities

= ₹ 39,67,500 + ₹ 2,50,000 + ₹ 2,30,000 - ₹ 30,000 + ₹ 1,00,000

= ₹ 35,57,500

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Distribution of Profit Among Partners
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