Loss on sale of machinery 4,400 Operating profit before change in working capital 2,000 Add: Decrease in current assets and increase in C.L Increase in creditors 53,400 Increase in other current liabilities. 5,000 Less: Increase in current assets and decrease in C.L 5,000 Increase in inventories/stock 63,400 Increase in trade receivable(debtors) (15,000) Decrease in B/P (5,000) Net Cash flow from operating activities (20,000) 23,400 Working note: Interest on Debenture 1. = 60,000 X 4/12 X 6/ 100 = 1200 2. = 80,000 X 8/12 X 6/ 100 = 3200 4400 From the following information, calculate the cash flow from Investing Activities.’ Particulars Opening Balance (Rs) Closing Balance (Rs) Furniture (At cost) 20,000 28,000 Accumulated Depreciation on Furniture 6,000 9,000 During the year, furniture costing Rs. 4,000 was sold at a profit of Rs. 3,000. Depreciation on furniture charged during the year amounted to Rs. 5,000. OR During the year, furniture costing Rs. 4,000 (accumulated depreciation there on Rs. 2,000) was sold at Rs. 5,000. HINTS: * There is need to prepare & for ‘Furniture a/c’ ‘Prov. Dep. a/c’. *‘Furniture A/c is required to ascertain the amount of furniture Purchased during the year. *‘Provision for Depreciation A/c is required to ascertain the depreciation provided during the year. Solution: Furniture Account Particulars (Rs.) Particulars (Rs.) To Balance b/d 20,000 (Sale of Furniture) 5,000 By Bank A/c To Profit & Loss A/c (Gain on Sale) 3,000 By Accumulated Dep. A/c 2,000 12,000 By Balance c/d 28,000 To Bank A/c (Balan. fig. being furniture purchased) 35,000 35,000
Loss on sale of machinery Operating profit before change in working capital Add: Decrease in current assets and increase in C.L Increase in creditors Increase in other current liabilities. Less: Increase in current assets and decrease in C.L Increase in inventories/stock Increase in trade receivable(debtors) Decrease in B/P Net Cash flow from operating activities 23,400 4,400 2,000 53,400 5,000 5,000 63,400 (15,000) (5,000) (20,000) Working note: Interest on Debenture 1. = 60,000 X 4/12 X 6/ 100 = 1200 2. = 80,000 X 8/12 X 6/ 100 = 3200 4400 From the following information, calculate the cash flow from Investing Activities.’ Particulars Opening Balance (Rs) Closing Balance (Rs) Furniture (At cost) 20,000 28,000 Accumulated Depreciation on Furniture 6,000 9,000 During the year, furniture costing Rs. 4,000 was sold at a profit of Rs. 3,000. Depreciation on furniture charged during the year amounted to Rs. 5,000. OR During the year, furniture costing Rs. 4,000 (accumulated depreciation there on Rs. 2,000) was sold at Rs. 5,000. HINTS: * There is need to prepare ‘Furniture a/c’ & ‘Prov. for Dep. a/c’. *‘Furniture A/c is required to ascertain the amount of furniture Purchased during the year. *‘Provision for Depreciation A/c is required to ascertain the depreciation provided during the year. Solution: Furniture Account Particulars (Rs.) Particulars (Rs.) To Balance b/d To Profit & Loss A/c (Gain on Sale) To Bank A/c (Balan. fig. being furniture purchased) 20,000 3,000 12,000 By Bank A/c (Sale of Furniture) By Accumulated Dep. A/c By Balance c/d 5,000 2,000 28,000 35,000 35,000
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