For the year ending 31st March, $\displaystyle 2025$ Gavi Ltd. made a profit of ₹ $\displaystyle 8,00,000$ after charging depreciation of ₹ $\displaystyle 50,000$ on fixed assets and transferring ₹ $\displaystyle 1,15,000$ to general reserve. Goodwill written off during the year was ₹ $\displaystyle 75$,000. During the year the company sold machinery of the book value of ₹ $\displaystyle 2,00,000$ at a gain of ₹ $\displaystyle 30$,000. During the year, the trade receivables decreased by ₹ $\displaystyle 20,000$ and trade payables increased by ₹ $\displaystyle 25$,000. Prepaid expenses decreased by ₹ $\displaystyle 1,000$ and outstanding rent increased by ₹ $\displaystyle 5$,000. Calculate Cash flows from operating activities.

Calculation of cash flows from operating activities : Particulars (₹) Net Profit before tax (Working Note $\displaystyle 1$) $\displaystyle 9,15,000$ Adjustment for- Add: Depreciation on fixed assets $\displaystyle 50,000$ Add: Goodwill written off $\displaystyle 75,000$ Less: Gain on sale of machinery $\displaystyle (30,000)$ Operating Profit before Working Capital Changes $\displaystyle 10,10,000$ Add: Decrease in Trade Receivables $\displaystyle 20,000$ Add: Increase in Trade Payables $\displaystyle 25,000$ Add: Decrease in Prepaid expenses $\displaystyle 1,000$ Add: Increase in outstanding rent $\displaystyle 5,000$ Cash inflows from operating activities $\displaystyle 10,61,000$ Working Note $\displaystyle 1$: Calculation of Net Profit before tax: (₹) Net Profit $\displaystyle 8,00,000$ Add : Amount transferred to general reserve $\displaystyle 1,15,000$ Net Profit before tax: $\displaystyle 9,15,000$ PART B OPTION II (Computerised Accounting)