Question

Calculate Cash Flow from Operating Activities from the following information.

Particular	31st 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

Answer 1

Cash Flow from Operating Activities
	Particulars	Amount (Rs)	Amount (Rs)
	Profit as per Statement of Profit and Loss		8,00,000
	Add: Provision for Tax		1,10,000
	Add: Proposed Dividend Less: Income Tax Refund Less: Compensation for Natural Disaster		1,10,000 (10,000) (75,000)
	Profit Before Tax and Extraordinary items		9,35,000
	Items to be Added:
	Depreciation on Plant and Machinery	1,50,000
	Loss on sale of Investment	30,000	1,80,000
			11,15,000
	Items to be Deducted:
	Profit on Sale of Land	(90,000)
	Dividend Received	(20,000)	(1,10,000)
	Operating Profit before Working Capital Adjustments		10,05,000
	Add: Increase in Current Liabilities	70,000
	Add:Decrease in Current Assets	40,000	1,10,000
			11,15,000
	Less: Decrease in Current Liabilities	(10,000)
	Less: Increase in Current Assets	(60,000)	(70,000)
	Cash Generated from Operations		10,45,000
	Less: Tax Paid		(1,20,000)
	Cash Flow from operations after Tax		9,25,000
	Add: Compensation for Natural Disaster Add: Income Tax Refund		75,000 10,000
	Net Cash Flows from Operating Activities		10,10,000