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.
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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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| 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/-
Hope this helps
Please get back to us in case of any query
Keep posting
Regards