Please answer this
Q.19. 'Shri Ltd.' was carrying on a business of packaging in Delhi and earned good profits in the past years. The company wanted to expand its business and required additional funds. To meet its requirements, the company issued equity shares of Rs. 30,00,000. It purchased a computerized machine of Rs. 20,00,000. It also purchased raw material amounting to Rs. 2,00,000. During the current year the Net Profit of the company was Rs. 15,00,000.
Find out 'Cash flows from operating activities' from the above transactions.

Dear Student

 
Cash Flow Statement
  Particulars Amount Amount
A Cash Flow From Operating Activities    
  Net Profit (Loss) Before Tax and extra ordinary items   1,500,000
   Add : Non cash expenses and non operating expenses    
  Provision for Income Tax 0  
  Loss on Sale of Fixed Asset 0  
  Depreciation  0  
  Goodwill Writtenoff 0 0
     Less : Non operating income    
           Profit on Sale of Fixed Assets 0 0
  Operating profit Before working capital changes   1,500,000
  Add : Decrease in Current Assets  0  
            Increase in Current Liabilities 0  
  Less : Increase in Current Assets 0  
            Decrease in Current Liabilities  0 0
  Cash Generated from operating activities   1,500,000
  Less : Income Tax Paid   0
  Cash Flow before extra ordinary items   1,500,000
  Add / less Extra ordinary items   0
  Net Cash Flow from operating activities   1,500,000


From the question only net profit is the thing which represents the operating activity , therefore Cash flow from operating activity is Rs 15,00,000/-

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  • -1
Cash flow from operating activities=Net profit of the company=Rs. 15,00,000
  • 2
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