Calculate Cash Flow from Operating Activities from the following information:

INCOME STATEMENT (STATEMENT OF PROFIT AND LOSS)
for the year ended 31st March, 2019

Particulars

Note No.

(₹)

I. Revenue from Operations (Sales)
5,98,000

II. Other Income
1

19,500

III. Total Revnue (I + II)
6,17,500

IV. Expenses;

Cost of Materials Consumed

4,00,000

Change in Inventories of Finished Goods and Work-in-Progress

2

15,000

Employee Benefit Expenses

1,05,000

Depreciation and Amortisation Expenses

15,000

Other Expenses
3
20,000

Total Expenses

5,55,000

V. Profit before Tax (III − IV)
62,500

VI. Tax @ 30%
18,750

VII. Profit after Tax (V − VI)
43,750

Notes to Accounts

Particulars

₹

1. Other Income

Rent

15,000

Gain (Profit) on Sale of Machinery

2,500

Interest on Debentures held as Investments

2,000

19,500

Changes in Inventories of Finished Goods and Work-in-Progress

(a) Finished Goods

Opening Inventories
37,500

Less: Closing Inventories
25,000

Sub-Total
12,500

(b) Work-in-Progress

Opening Inventories

22,500

Less: Closing Inventories

20,000

Sub-Total

2,500

Total (a + b)

15,000

2. Other Expenses

Office Expenses

12,500

Selling Expenses

6,000

Loss on Sale of Furniture

1,500

20,000

Current Assets and Current Liabilities
As on 31st March,
2019 (₹)

As on 1st April,
2018 (₹)

Trade Receivables
25,000

20,000

Trade Payables
32,500

35,000

Outstanding Expenses
8,000

5,000

Prepaid Expenses
5,000

3,500

INCOME STATEMENT (STATEMENT OF PROFIT AND LOSS)
for the year ended 31st March, 2019
Particulars	Note No.	(₹)
I. Revenue from Operations (Sales)		5,98,000
II. Other Income	1	19,500
III. Total Revnue (I + II)		6,17,500
IV. Expenses;
Cost of Materials Consumed		4,00,000
Change in Inventories of Finished Goods and Work-in-Progress	2	15,000
Employee Benefit Expenses		1,05,000
Depreciation and Amortisation Expenses		15,000
Other Expenses	3	20,000
Total Expenses		5,55,000
V. Profit before Tax (III − IV)		62,500
VI. Tax @ 30%		18,750
VII. Profit after Tax (V − VI)		43,750

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Solution

Cash Flow Statement

for the year ended March 31, 2019

Particulars

Amount

(₹)

Amount

(₹)

A

Cash Flow from Operating Activities

Profit as per Statement of Profit and Loss

43,750

Add: Provision for Tax

18,750

Profit Before Taxation

62,500

Items to be Added:

Depreciation and Amortization Expenses

15,000

Loss on Sale of Furniture

1,500

Items to be Deducted:

Profit on Sale of Machinery

(2,500)

Rent

(15,000)

Interest on Investment

(2,000)

(3,000)

Operating Profit before Working Capital Adjustments

59,500

Less: Increase in Current Assets

Trade Receivables

(5,000)

Prepaid Expenses

(1,500)

Less: Decrease in Current Liabilities

Trade Payables

(2,500)

Add: Increase in Current Liabilities

Outstanding Expenses

3,000

Add: Decrease in Current Assets

Inventory (Finished goods ₹12,500 + Work-in-Progress ₹2,500)

15,000

9,000

Cash Generated from Operations

68,500

Less: Tax Paid

(18,750)

Net Cash Flows from Operating Activities

49,750

Suggest Corrections

Similar questions

From the following Balance Sheet as at 31st March, 2019 and Statement of Profit and Loss for the year ended 31st March, 2019 of RSB Ltd. and additional information, prepare Cash Flow Statement:

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,50,000	5,00,000
(b) Reserves and Surplus	1	9,50,000	3,00,000
2. Non-Current Liabilities
Long-term Borrowings (5% Debentures)		7,00,000	4,00,000
3. Current Liabilities
(a) Trade Payables		1,10,000	90,000
(b) Other Current Liabilities	2	39,000	25,000
(c) Short-term Provisions (Provision for Tax)		2,60,000	2,25,000
Total		28,09,000	15,40,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets – Tangible	3	6,85,000	7,45,000
(b) Non-current Investments		7,50,000	2,50,000
2. Current Assets
(a) Current Investments		6,74,000	95,000
(b) Inventories		1,00,000	2,00,000
(c) Trade Receivables		4,00,000	1,50,000
(d) Cash and Cash Equivalents		2,00,000	1,00,000
Total		28,09,000	15,40,000

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019
Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. Revenue from Operations	4	40,00,000	35,00,000
II. Other Income	5	35,000	30,000
III. Total Revenue (I + II)		40,35,000	35,30,000
IV. Expenses:
Purchases of Stock-in-Trade		27,00,000	24,70,000
Change in Inventories of Stock-in-Trade	6	1,00,000	50,000
Finance Cost		27,500	20,000
Depreciation		40,000	45,000
Other Expenses		22,500	20,000
Total Expenses		28,90,000	26,05,000
V. Profit before Tax (III – IV)		11,45,000	9,25,000
VI. Less: Tax		3,45,000	2,25,000
VII. Profit after Tax (V – VI)		8,00,000	7,00,000

Notes to Accounts

Particular		31^st March 2019 (₹)	31^st March 2018 (₹)
1.	Reserves and Surplus
	Debenture Redemption Reserve	1,00,000	1,00,000
	Surplus, i.e., Balance in Statement of Profit and Loss	8,50,000	2,00,000
		9,50,000	3,00,000
2.	Other Current Liabilities
	Interest on Debentures	35,000	20,000
	Outstanding Expenses	4,000	5,000
		39,000	25,000
3.	Fixed Assets–Tangible
	Cost	8,90,000	9,90,000
	Less: Accumulated Depreciation	2,05,000	2,45,000
		6,85,000	7,45,000
4.	Revenue from Operations
	Sales	42,00,000	35,75,000
	Less: Sales Return	2,00,000	75,000
		40,00,000	35,00,000
5.	Other Income
	Interest on Deposits	15,000	12,500
	Dividend on Investments	10,000	17,500
	Gain (Profit) on Sale of Fixed Assets	10,000	…
		35,000	30,000
6.	Change in Inventories of Stock-in-Trade
	Opening Stock	2,00,000	2,50,000
	Less: Closing Stock	1,00,000	2,00,000
		1,00,000	50,000

Additional Information:

From the following Balance Sheet of Combiplast Ltd. for the year ended 31st March, 2019 and additional information, calculate Cash Flow from Investing Activities:

Particulars ulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,50,000	5,00,000
(b) Reserves and Surplus		10,00,000	8,50,000
2. Current Liabilities		4,50,000	3,50,000
Total Total Expenses		22,00,000	17,00,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible Assets	1	12,00,000	12,00,000
(b) Non-Current Investments		5,00,000	3,00,000
2. Current Assets
(a) Trade Receivables		3,00,000	1,10,000
(b) Cash and Cash Equivalents		2,00,000	90,000
Total		22,00,000	17,00,000

Notes to Accounts

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
I. Tangible Assets
Land	3,00,000	3,00,000
Building	4,00,000	4,00,000
Plant and Machinery	5,00,000	5,00,000
	12,00,000	12,00,000

Additional Information: During the year the company sold machinery at Book Value of ₹ 1,50,000.

Prepare Cash Flow Statement from the following:

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019

Particulars ulars	Note No.	(₹)
I. Revenue from Operations (Net Sales)		36,00,000
II. Expenses;
Purchases of Stock-in-Trade		28,16,000
Change in Inventories of Stock-in-Trade		(65,000)
Finance Costs		15,000
Depreciation and Amortisation Expenses		80,000
Other Expenses		5,34,000
Total		33,80,000
III. Profit before Tax (I − II)		2,20,000
IV. Less: Provision for Tax		40,000
V. Profit after Tax (III − IV)		1,80,000

BALANCE SHEET
as at 31st March, 2019

Particulars ulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		6,00,000	5,00,000
(b) Reserves and Surplus	1	3,00,000	1,20,000
2. Non-Current Liabilities
Long-term Loan		1,20,000	1,50,000
3. Current Liabilities
(a) Short-term Borrowings: Bank Overdraft		13,000	...
(b) Trade Payables (Creditors)		2,85,000	2,38,000
(c) Short-term Provision: Provision form Tax		44,000	30,000
Total Total Expenses		13,62,000	10,38,000
II. ASSETS
1. Non-Current Assets
Fixed Assets		6,20,000	4,00,000
2. Current Assets
(a) Short-term Investments (Marketable Security)		34,000	20,000
(b) Inventories		3,28,000	2,63,000
(c) Trade Receivables		3,48,000	3,10,000
(d) Cash and Cash Equivalents	2	32,000	45,000
Total		13,62,000	10,38,000

Notes to Accounts

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	3,00,000	1,20,000
2. Cash and Cash Equivalents
Cash in Hand	32,000	17,000
Cash at Bank	...	28,000
	32,000	45,000

Q. From the following information, prepare Trading account for the year ended 31st March, 2019:
Adjusted Purchases ₹ 5,50,000; Sales ₹ 6,25,000; Freight and Carriage Inwards ₹ 3,000; Wages ₹ 7,000; Freight and Cartage Outwards ₹ 2,500; Closing Stock ₹ 50,000.

Q. Calculate Cash Flow from Operating Activities from the following information.

Particular	31^st March 2017 (Rs)
Net Profit (Difference between Closing and Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss)	8,00,000
Final Dividend paid in the year	1,10,000
Compensation for Natural Disaster credited to Statement of Profit and Loss	75,000
Depreciation	1,50,000
Loss on Sale of Investment	30,000
Gain (Profit) on Sale of Land	90,000
Provision for Tax	1,10,000
Dividend Received	20,000
Decrease in Current Assets (Other than Cash and Cash Equivalents)	40,000
Increase in Current Liablilities	70,000
Decrease in Current Liabilities	10,000
Increase in Current Assets (Other than Cash and Cash Equivalents)	60,000
Income Tax Refund	10,000
Income Tax Paid	1,20,000

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Particulars	₹
1. Other Income
Rent	15,000
Gain (Profit) on Sale of Machinery	2,500
Interest on Debentures held as Investments	2,000
	19,500
Changes in Inventories of Finished Goods and Work-in-Progress
(a) Finished Goods
Opening Inventories	37,500
Less: Closing Inventories	25,000
Sub-Total	12,500
(b) Work-in-Progress
Opening Inventories	22,500
Less: Closing Inventories	20,000
Sub-Total	2,500
Total (a + b)	15,000
2. Other Expenses
Office Expenses	12,500
Selling Expenses	6,000
Loss on Sale of Furniture	1,500
	20,000

Current Assets and Current Liabilities	As on 31st March, 2019 (₹)	As on 1st April, 2018 (₹)
Trade Receivables	25,000	20,000
Trade Payables	32,500	35,000
Outstanding Expenses	8,000	5,000
Prepaid Expenses	5,000	3,500

		Cash Flow Statement for the year ended March 31, 2019
	Particulars		Amount (₹)	Amount (₹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			43,750
	Add: Provision for Tax			18,750
	Profit Before Taxation			62,500
	Items to be Added:
	Depreciation and Amortization Expenses		15,000
	Loss on Sale of Furniture		1,500
	Items to be Deducted:
	Profit on Sale of Machinery		(2,500)
	Rent		(15,000)
	Interest on Investment		(2,000)	(3,000)
	Operating Profit before Working Capital Adjustments			59,500
	Less: Increase in Current Assets
	Trade Receivables		(5,000)
	Prepaid Expenses		(1,500)
	Less: Decrease in Current Liabilities
	Trade Payables		(2,500)
	Add: Increase in Current Liabilities
	Outstanding Expenses		3,000
	Add: Decrease in Current Assets
	Inventory (Finished goods ₹12,500 + Work-in-Progress ₹2,500)		15,000	9,000
	Cash Generated from Operations			68,500
	Less: Tax Paid			(18,750)
	Net Cash Flows from Operating Activities			49,750