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Question -

Compute cash from operations from the following figures:
(i) Profit for the year 2016-17 is a sum of ₹. 10,000 after providing for depreciation of ₹. 2,000.
(ii) The current assets and current liabilities of the business for the year ended March 31, 2016 and 2015 are as follows:

Particular

March
31, 2016
(₹)

March
31, 2017
(₹)

Trade Receivables

14,000

15,000

Provision for Doubtful Debts

1,000

1,200

Trade Payables

13,000

15,000

Inventories

5,000

8,000

Other Current Assets

10,000

12,000

Expenses payable

1,000

1,500

Prepaid Expenses

2,000

1,000

Accrued Income

3,000

4,000

Income received in advance

2,000

1,000



Answer -


Cash Flow Statement

for the Year Ending March 31, 2017

Particulars

Details

(₹)

Amount

(₹)

Cash from Operating Activities

 Net Profit

10,000

Items to be added:

  Depreciation

2,000

2,000

Operating Profit before Working Capital Adjustments

12,000

Less: Increase in Current Assets

Trade Receivables

(1,000)

Accrued Income

(1,000)

Accrued Income

(2,000)

Other Current Assets

(3,000)

Inventories

Add: Increase in Current Liabilities

Provision for Doubtful Debts

200

Trade Payables

2,000

Expense Payable

500

Add: Decrease in Current Assets

Prepaid Expenses

(1,000)

Less: Decrease in Current Liabilities

Income received in advance

1,000

Net Cash From Operating Activities

7,700

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