Anand Ltd. arrived at a net income of Rs 5,00,000 for the year ended March 31, 2017. Depreciation for the year was Rs 2,00,000. There was a gain of Rs 50,000 on assets sold which was credited to profit and loss account. Bills Receivables increased during the year Rs 40,000 and Bills Payables also increased by Rs 60,000. Compute the cash flow operating activities by the indirect approach.

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Solution

Cash Flow from Operating Activities as on March 31, 2017

Particulars

Amount

Rs

Amount

Rs

Net Profit during the year

5,00,000

Items to be adjusted:

Add: Depreciation

2,00,000

Less: Gain on sale of assets

(50,000)

1,50,000

Operating Profit before Working Capital changes

6,50,000

Add: Increase in Bills Payable

60,000

Less: Increase in Bills Receivable

(40,000)

20,000

Net Cash from Operations

6,70,000

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Q. The following is the profit and loss account of Yamuna Limited. Yamuna Limited Profit and Loss Account for the year ended March 31, 2007

\begin{matrix} Particulars & Amt. (Rs.) & Amt. (Rs.) Sales & 10, 00, 000 Cost of Goods Sold Opening Stock & 2, 50, 000 Purchase & 5, 00, 000 - -------- - 7, 50, 000 (-)Closing Stock & 2, 00, 000 - -------- - & 5, 50, 000 - -------- - Gross Profit & 4, 50, 000 Operating Expenses & 3, 00, 000 - -------- - Net Profit & 1, 50, 000 - -------- - \end{matrix}

Additional Informations:
(i) Trade debtors decrease by Rs. 30,000 during the year.
(ii) Prepaid expenses increase by Rs. 5,000 during the year.
(iii) Trade creditors decrease by Rs. 15,000 during the year.
(iv) Outstanding expenses increased by Rs. 3,000 during the year.
(v) Operating expenses included depreciation of Rs. 25,000.

Compute net cash provided by operations for the year ended March 31, 2007 by the indirect method.

The following is the statement of Profit and Loss of Yamuna Limited for the year ended March 31, 2017:
$\begin{matrix} Particulars & Note & Amount No. I. Revenue From Opeerations (Sales) & 10, 00, 000 - --------- - II. Expenses: Purchases & 5, 00, 000 Changes in Inventories (Opening Inventory - Closing Inventory) (2, 50, 000 - 2, 00, 000) & 50, 000 Other Expenses & 3, 00, 000 - -------- - Total Expenses & 8, 50, 000 - -------- - III. Profit Before Tax (I-II) & 1, 50, 000 \end{matrix}$

Additional Information:
(1) Trade Receivables decrease by Rs. 30,000 during the year.
(2) Prepaid expenses increase by Rs. 5,000 during the year.
(3) Trade payables decrease by Rs. 15,000 during the year.
(4) Outstanding expenses increased by Rs. 3,000 during the year.
(5) Operating expenses included depreciation of Rs. 25,000.

Compute net cash provided by operations for the year ended March 31,2017 by the indirect method.

The following is the Profit and Loss Account of Yamuna Limited:

Statement of Profit and Loss of Yamuna Ltd. for the Year ended March 31, 2017
Particulars		Note No.	Amount (Rs)
i)	Revenue from Operations		10,00,000
ii)	Expenses
	Cost of Material Consumed	1	50,000
	Purchase of Stock-in-trade		5,00,000
	Other Expenses	2	3,00,000
	Total Expenses		8,50,000
iii)	Profit before Tax (I – ii)		1,50,000

Additional information:

(i) Trade receivables decrease by Rs 30,000 during the year.

(ii) Prepaid expenses increase by Rs 5,000 during the year.

(iii) Trade creditors decrease by Rs 15,000 during the year.

(iv) Outstanding expenses payable increased by Rs 3,000 during the year.

(v) Operating expenses included depreciation of Rs 25,000.

Compute net cash provided by operations for the year ended March 31, 2017 by the indirect method.

Subscription received in cash during the year amounted to Rs. 60,000; subscription received in advance for next year was Rs. 3,000 and received in advance during the previous year was Rs. 2,000. Subscription in arrear at the end of the current year was Rs. 5,400. The amount credited to Income and Expenditure Account will be:

Subscription received in cash during the year amounted to Rs. 40,000; subscription outstanding at the end of the previous year was Rs. 1,500 and outstanding at the end of the current year was Rs. 2,000. Subscription received in advance for next year was Rs. 800. The amount credited to Income and Expenditure Account will be:

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Cash Flow from Operating Activities as on March 31, 2017
Particulars		Amount Rs	Amount Rs

Net Profit during the year			5,00,000
Items to be adjusted:
	Add: Depreciation	2,00,000
	Less: Gain on sale of assets	(50,000)	1,50,000
Operating Profit before Working Capital changes			6,50,000
	Add: Increase in Bills Payable	60,000
	Less: Increase in Bills Receivable	(40,000)	20,000
Net Cash from Operations			6,70,000