From the following extracts of a company’s Balance Sheets, and the additional information, you are required to calculate Cash from Operating Activities for the year ending 31st March, 2021.
Anjan Ltd. reported a profit of ₹ 80,000 for the year ended 31st March, 2021, after considering the following:
|(i) Tax provided during the year||4,000|
|(ii) Amortization of Patents||10,000|
|(iii) Profit on sale of Vehicle||3,000|
|(iv) Writing off Preliminary expenses||2,000|
|During the year, machinery costing ₹ 40,000 (accumulated
depreciation thereon being ₹ 18,000) was sold for ₹ 6,000.
|31.03.2021 (₹)||31.03.2020 (₹)|
|Cash at Bank||8,000||10,000|
|Plant & Machinery||88,000||1,30,000|
|Cash Flow from Operating Activities||₹|
|Net Profit (After Tax)||80,000|
|Add: Provision for Tax||4,000|
|Net Profit Before Tax||84,000|
|Add: Non-cash items and non-operating expenses||₹|
|Preliminary expenses written off:||2,000||46,000|
|Amortisation of patents:||10,000|
|Loss on sale of Machinery:||16,000|
|Less: Non-operating incomes||(3000)|
|Profit on sale of vehicle|
|Operating profit before changes in working capital||1,27,000|
|Less: Increase in Trade Receivable||(4,000)|
|Add: Decrease in Inventory||3,000|
|Less: Decrease in Trade Payable||(2,000)|
|Net Cash Flow from Operating Activities||1,24,000|
(1) Tax provided during the year will be added to Net Profit (After Tax) to derive Net Profit Before Tax.
(2) Change in the balance of plant and machinery will be considered in Cash Flow from Investing Activities.
|Machinery cost:||₹ 40,000|
|(-) Accumulated depreciation||(18,000)|
|(-) Sale value||(6,000)|
|Loss on sale||16,000|