Question

Compute cash from operations from the following figures:

(i) Profit for the year 2016-17 is a sum of Rs. 10,000 after providing for depreciation of Rs. 2,000.

(ii) The current assets of the business for the year ended March 31, 2016 and 2017 are as follows:

	March 31, 2016 (Rs.)	March 31, 2017 (Rs.)
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
Short-term Investments	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 1

Cash Flow Statement for the Year Ending March 31, 2017
Particulars	Details (Rs)	Amount (Rs)
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)
Short-term Investments	(2,000)
Inventories	(3,000)
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