Question

Calculate Cash Flow from Operating Activities from the following details:

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
Surplus, i.e., Balance in Statement of Profit and Loss	80,000	60,000
Trade Receivables	25,000	31,000
Provision for Depreciation	40,000	30,000
Inventories	80,000	60,000
Outstanding Rent	12,000	21,000
Goodwill	30,000	38,000
Prepaid Insurance	1,000	2,000
Trade Payables (Creditors)	13,000	19,000

Answer 1

	Particulars		Amount (₹)	Amount (₹)
	Profit as per Statement of Profit and Loss (Net Income)			20,000
	Items to be Added:
		Depreciation	10,000
		Goodwill written off	8,000	18,000
	Operating Profit before Working Capital Changes			38,000
	Add: Decrease in Current Assets
		Trade Receivables	6,000
		Prepaid Insurance	1,000
	Less: Increase in Current Assets
		Inventories	(20,000)
	Less: Decrease in Current Liabilities
		Outstanding Rent	(9,000)
		Trade Payables	(6,000)	(28,000)
	Cash Generated from operations			10,000
	Less: Tax Paid			Nil
	Net Cash Flows from Operating Activities			10,000