Question

From the following information, calculation Cash Flow from Operating Activities and Investing Activities:

Particular	31st, March, 2018, (₹)	31st, March, 2019, (₹)
Surplus, i.e., Balance in Statement of Profit and Loss	2,50,000	10,00,000
Provision for Tax	75,000	75,000
Trade Payables	1,00,000	3,75,000
Current Assets (Trade Receivables and Inventories)	11,50,000	13,00,000
Fixed Assets (Tangible)	21,25,000	23,30,000
Accumulated Depreciation	10,62,500	11,00,000

Additional Information:
1. A machine having book value of ₹ 1,00,000 (Depreciation provided thereon ₹ 1,62,500) was sold at a loss of ₹ 20,000.
2. Tax paid during the year ₹ 75,000.

Answer 1

Cash flow Statement
for the year ended 31st March, 2019
Particulars	Amount (₹)	Amount (₹)
A. Cash Flow from Operating Activities
Net Profit as per Statement of Profit & Loss	7,50,000
Add: Provision for Tax made	75,000
Net Profit before Tax and Extraordinary Items	8,25,000
Add: Depreciation charged during the year	2,00,000
Add: Loss on Sale of Machine	20,000
Net Profit before working Capital changes	10,45,000
Add: Increase in Trade Payables	2,75,000
Less: Increase in Current Assets	(1,50,000)
Net Profit before Tax	11,70,000
Less: Tax Paid during the year	75,000
Cash Flow from Operating Activities		10,95,000
B. Cash flow from Investing Activities
Purchase of Fixed Asset	(4,67,500)
Sale of Machine	80,000
Cash used in Investing Activities		3,87,500

Dr.	Accumulated Depreciation A/c						Cr.
Date		Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2019				2018
March 31		To Fixed Asset A/c (Depreciation on Mach. Sold)	1,62,500	April 01	By Balance b/d	10,62,500
March 31		To balance c/d	11,00,000		By Statement of Profit & Loss A/c (Bal. Fig.)	2,00,000
			12,62,500			12,62,500

Dr.	Fixed Assets A/c						Cr.
Date		Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2018				2019
April 01		To balance b/d	21,25,000	March 31	By Accumulated Depreciation A/c	1,62,500
2019				March 31	By Statement of Profit & Loss A/c- Loss	20,000
				March 31	By Bank A/c (1,00,000 – 20,000)	80,000
March 31		To Cash/Bank A/c	4,67,500	March 31	By balance c/d	23,30,000
			25,92,500			25,92,500