(a)

From the following information extracted from the books of Kant Ltd., calculate 'Cash Flows from Operating Activities'. Profit earned during the year is ₹ $\displaystyle 1,95,000$ after considering the following items : Particulars Amount ( ) Depreciation on Machinery $\displaystyle 50,000$ Goodwill written off $\displaystyle 30,000$ Loss on Sale of Machinery $\displaystyle 10,000$ Transfer to General Reserve $\displaystyle 1,05,000$ At the end of the year, Trade Receivables showed an increase of ₹ $\displaystyle 2,00,000$ and Trade Payables a decrease of $\displaystyle 10$,000. (b) From the following information extracted from the books of Vandana Ltd., calculate Cash Flows from Investing Activities. $\displaystyle 31.3.2023$ $\displaystyle 31.3.2024$ Particulars ( ) ( ) Machinery $\displaystyle 24,00,000$ $\displaystyle 28,00,000$ Accumulated Depreciation ($\displaystyle 2,00,000$) ($\displaystyle 3,00,000$) on Machinery $\displaystyle 22,00,000$ $\displaystyle 25,00,000$ Additional Information : A piece of machinery costing ₹ $\displaystyle 8,00,000$ on which accumulated depreciation was $\displaystyle 40,000$, was sold for $\displaystyle 5,00$,000.

Calculation of Cash Flow from Operating Activities Particulars Amount (₹) Net Profit before Tax and Extraordinary Items (W.N $\displaystyle 1$) $\displaystyle 3,00,000$ Add: Non Cash & Non-Operating Items Depreciation on Machinery ₹$\displaystyle 50,000$ Goodwill written off ₹$\displaystyle 30,000$ ($\displaystyle 1$ ½) Loss on sale of Machinery ₹$\displaystyle 10,000$ $\displaystyle 90,000$ Operating Profit before Working Capital Changes $\displaystyle 3,90,000$ Less: Decrease in Current Liabilities & Increase in Current Assets Increase in Trade Receivables (₹$\displaystyle 2,00,000$) Decrease in Trade Payables (₹$\displaystyle 10,000$) ($\displaystyle 1$) ($\displaystyle 2,10,000$) Net Cash inflow from Operating Activities…………….. ….( ½ ) $\displaystyle 1,80,000$ Working Note :- 1. Calculation of Net Profit before Tax and Extraordinary Items Profit earned during the year = $\displaystyle 1,95,000$ + Transfer to General Reserve = $\displaystyle 1,05,000$ $\displaystyle 3,00,000$ $\displaystyle 1$ Q.(b) From the following information….. Ans. Calculation of Cash Flow from Investing Activities Particulars Amount (₹) Purchase of Machinery (W.N.1) ($\displaystyle 12,00,000$) Proceeds from the sale of Machinery $\displaystyle 5,00,000$ Net cash outflow from Investing Activities ($\displaystyle 7,00,000$) Working Notes: 1. Dr. Machinery A/c Cr. Particulars Amount Particulars Amount (₹) (₹) To Balance b/d $\displaystyle 24,00,000$ By Accumulated Depreciation A/c $\displaystyle 40,000$ By Bank A/c $\displaystyle 5,00,000$ To Bank A/c $\displaystyle 12,00,000$ By Statement of Profit & Loss $\displaystyle 2,60,000$ (Balancing figure) By Balance c/d $\displaystyle 28,00,000$ $\displaystyle 36,00,000$ $\displaystyle 36,00,000$ Dr. Accumulated Depreciation A/c Cr. Particulars Amount Particulars Amount (₹) (₹) To Machinery A/c $\displaystyle 40,000$ By Balance b/d $\displaystyle 2,00,000$ To Balance c/d $\displaystyle 3,00,000$ By Statement of Profit & Loss $\displaystyle 1,40,000$ $\displaystyle 3,40,000$ $\displaystyle 3,40,000$ PART B OPTION II (Computerised Accounting)