Grand Hospitality Ltd., reported Net Profit after Tax of ₹ 6,40,000 for the year ended 31st March, 2019. The relevant extract from Balance Sheet as at 31st March, 2019 is:

Particulars
31st March, 2019 (₹) 31st March, 2018 (₹)

Inventories 1,15,000 1,25,000

Trade Receivables 1,50,000 1,10,000

Prepaid Expenses 20,000 6,000

Trade Payables 1,10,000 80,000

Provision for Tax 20,000 15,000

Depreciation charged on Plant and Machinery ₹ 55,000, insurance claim received ₹ 50,000, gain (profit) on sale of investment ₹ 20,000 appeared in the Statement of Profit and Loss for the year ended 31st March, 2019. Calculate Cash Flow from Operating Activities.

Open in App

Solution

Cash Flow from Operating Activities

Particulars

Amount

(₹)

Amount

(₹)

Profit as per Statement of Profit and Loss

6,40,000

Add: Provision for Tax 20,000

Less:Extraordinary Item

Insurance Claim

(50,000)

Profit Before Tax and Extraordinary items

6,10,000

Items to be Added:

Depreciation on Plant and Machinery

55,000

6,65,000

Items to be Deducted:

Gain on Sale of Investments

(20,000)

Operating Profit before Working Capital Adjustments

6,45,000

Add: Increase in Current Liabilities

Trade Payables

30,000

Add:Decrease in Current Assets

Inventories

10,000

40,000

Less: Increase in Current Assets

6,85,000

Trade Receivables

(40,000)

Prepaid Expenses

(14,000)

(54,000)

Cash Generated from Operations (before tax and Extraordinary items)

6,31,000

Less: Tax Paid (15,000)

Cash Flow from Operating Activities after Tax 6,16,000

Add:Extraordinary items

Insurance Claim

50,000

Net Cash Flows from Operating Activities

6,66,000

Suggest Corrections

Similar questions

Q. 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

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.

Q. From the following information of a club show the amounts of match expenses and match fund in the appropriate Financial Statements of the club for the year ended on 31st March, 2019:

Particulars	₹
Match expenses paid during the year ended 31st March, 2019	1,02,000
Match Fund as on 31st March, 2019	24,000
Donation for Match Fund (Received during the year ended 31st March, 2019)	40,000
Proceeds from the sale of match tickets (Received during the year ended 31st March, 2019)	15,000

Q. From the following information, prepare Trading Account for the year ended 31st March, 2019:

	₹		₹
Stock on 1st April, 2018	40,000	Returns Outward	80,000
Purchases	4,00,000	Wages and Salaries	50,000
Sales	3,80,000	Returns Inward	20,000
Carriage Inwards	20,000	Stock on 31st March, 2019	1,30,000

Net Realisable Value (Market Value) of stock as on 31st March, 2019 was ₹ 1,20,000.

Q. Following balances were extracted from the books of Vijay on 31st March, 2019:

Particulars	₹	Particulars	₹
Capital	2,45,000	Loan	78,800
Drawings	20,000	Sales	6,53,600
General Expenses	47,400	Purchases	4,70,000
Building	1,10,000	Motor Car	20,000
Machinery	93,400	Provision for Doubtful Debts	9,000
Stock on 1st April, 2018	1,62,000	Commission (Cr.)	13,200
Insurance	13,150	Car Expenses	18,000
Wages	72,000	Bills Payable	38,500
Debtors	62,800	Cash	800
Creditors	25,000	Bank Overdraft	33,000
Bad Debts	5,500	Charity	1,050

Prepare Trading and Profit and Loss Account for the year ended 31st March, 2019 and Balance Sheet as at that date after giving effect to the following adjustments:
(a) Stock as on 31st March, 2019 was valued at ₹ 2,30,000.
(b) Write off further ₹ 1,800 as Bad Debts and maintain the Provision for Doubtful Debts at 5%.
(c) Depreciate Machinery at 10%.
(d) Provide ₹ 7,000 as outstanding interest on loan.

Join BYJU'S Learning Program

Cash Flow from Operating Activities
	Particulars		Amount (₹)	Amount (₹)
	Profit as per Statement of Profit and Loss			6,40,000
	Add: Provision for Tax			20,000
	Less:Extraordinary Item
	Insurance Claim			(50,000)
	Profit Before Tax and Extraordinary items			6,10,000
	Items to be Added:
	Depreciation on Plant and Machinery			55,000
				6,65,000
	Items to be Deducted:
	Gain on Sale of Investments			(20,000)
	Operating Profit before Working Capital Adjustments			6,45,000
	Add: Increase in Current Liabilities
		Trade Payables	30,000
	Add:Decrease in Current Assets
		Inventories	10,000	40,000
	Less: Increase in Current Assets			6,85,000
		Trade Receivables	(40,000)
		Prepaid Expenses	(14,000)	(54,000)
	Cash Generated from Operations (before tax and Extraordinary items)			6,31,000
	Less: Tax Paid			(15,000)
	Cash Flow from Operating Activities after Tax			6,16,000
	Add:Extraordinary items
	Insurance Claim			50,000
	Net Cash Flows from Operating Activities			6,66,000