Question

The following is the Profit and Loss Account of Yamuna Limited:

Statement of Profit and Loss of Yamuna Ltd., for the Year ended March 31, 2017
Particulars		Note No.	Amount (Rs)
i)	Revenue from Operations		10,00,000
ii)	Expenses
	Cost of Materials Consumed	1	50,000
	Purchase of Stock-in-trade		5,00,000
	Other Expenses	2	3,00,000
	Total Expenses		8,50,000
iii)	Profit before Tax (i – ii)		1,50,000

Additional information:

(i) Trade receivables decrease by Rs 30,000 during the year.

(ii) Prepaid expenses increase by Rs 5,000 during the year.

(iii) Trade payables increase by Rs 15,000 during the year.

(iv) Outstanding expenses payable increased by Rs 3,000 during the year.

(v) Other expenses included depreciation of Rs 25,000.

Compute net cash from operations for the year ended March 31, 2017 by the indirect method.

Answer 1

Cash Flow from Operating Activities of Yamuna Limited as on March 31, 2017
Particulars			Amount Rs	Amount Rs
Net Profit earned during the year				1,50,000
Items to be added:
		Depreciation		25,000
Operating Profit before Working Capital changes				1,75,000
	Add:	Increase in Current Liabilities
		Outstanding Expenses	3,000
	Add:	Decrease in Current Assets
		Trade Receivables	30,000
		Stock	50,000	83,000
	Less:	Decrease in Current Liabilities
		Trade Creditors	(15,000)
	Less:	Increase in Current Assets
		Prepaid Expenses	(5,000)	(20,000)
Net Cash from Operations				2,38,000

Note: As per the solution, the Net Cash from Operating Activities is Rs 2,38,000, however, as per the answer given in the book is Rs 2,18,000.