In $\displaystyle 2011$, two young Indian entrepreneurs, Vaishali Bhatia and Vivek Bhatia decided to start an online auto portal. At that time, there were no major players in the market and they saw an opportunity to fill the gap. They used a user-friendly website and mobile app which made it easy for users to research and buy cars. It was converted into a company 'Car Easy Ltd.' in 2018. From the following Balance Sheet of the company as on 31st March, $\displaystyle 2022$, calculate 'Cash Flows From Operating Activities'. Balance Sheet of 'Car Easy Ltd' as at 31st March, $\displaystyle 2022$ Note $\displaystyle 31.3.2022$ $\displaystyle 31.3.2021$ Particulars No. < < I Equity and Liabilities : Shareholders' Funds 1. (a) Share Capital $\displaystyle 9,00,000$ $\displaystyle 3,00,000$ (b) Reserves and Surplus $\displaystyle 1$ $\displaystyle 75,000$ $\displaystyle 3,60,000$ 2. Non-Current Liabilities Long-term Borrowings $\displaystyle 2$ $\displaystyle 2,40,000$ $\displaystyle 1,80,000$ 3. Current Liabilities (a) Trade Payables $\displaystyle 18,000$ $\displaystyle 60,000$ (b) Short-term Provisions $\displaystyle 3$ $\displaystyle 2,04,000$ $\displaystyle 2,10,000$ Total $\displaystyle 14,37,000$ $\displaystyle 11,10,000$ II Assets : 1. Non-Current Assets Fixed Assets $\displaystyle 4$ $\displaystyle 10,08,000$ $\displaystyle 5,76,000$ 2. Current Assets (a) Inventories $\displaystyle 3,54,000$ $\displaystyle 3,87,000$ (b) Cash and Cash Equivalents $\displaystyle 75,000$ $\displaystyle 1,47,000$ Total $\displaystyle 14,37,000$ $\displaystyle 11,10,000$ Notes to Accounts : Note $\displaystyle 31.3.2022$ $\displaystyle 31.3.2021$ Particulars No. < < $\displaystyle 1$ Reserve and Surplus Surplus i.e. Balance in Statement of Profit and Loss $\displaystyle 75,000$ $\displaystyle 3,60,000$ $\displaystyle 75,000$ $\displaystyle 3,60,000$ $\displaystyle 2$ Long-term Borrowings $\displaystyle 10$% Debentures $\displaystyle 2,40,000$ $\displaystyle 1,80,000$ $\displaystyle 2,40,000$ $\displaystyle 1,80,000$ $\displaystyle 3$ Short-term Provisions Provision for Tax $\displaystyle 2,04,000$ $\displaystyle 2,10,000$ $\displaystyle 2,04,000$ $\displaystyle 2,10,000$ $\displaystyle 4$ Fixed Assets Machinery $\displaystyle 11,52,000$ $\displaystyle 6,45,000$ Accumulated Depreciation ($\displaystyle 1,44,000$) $\displaystyle (69,000)$ Total $\displaystyle 10,08,000$ $\displaystyle 5,76,000$ Additional Information : (i) $\displaystyle 10$% Debentures were issued on 31st March, 2021. (ii) Tax of ₹ $\displaystyle 80,000$ was paid during the year.

Calculation of ‘Cash Flows from operating activities’ for the year ended 31st March, $\displaystyle 2022$ Details Amount Particulars (₹) (₹) Net profit before tax and extraordinary items ($\displaystyle 2,11,000$) Add : Non-cash and Non-operating expenses : ½ Depreciation on machinery $\displaystyle 75,000$ ½ Interest on Debentures $\displaystyle 24,000$ $\displaystyle 1$ $\displaystyle 99,000$ Net profit before changes in working capital ($\displaystyle 1,12,000$) Add : Decrease in Current Assets and ½ Increase in Current Liabilities : Decrease in Inventories $\displaystyle 33,000$ Less : Increase in Current Assets and Decrease in Current Liabilities: Trade Payables $\displaystyle (42,000)$ ½ $\displaystyle (9,000)$ Cash generated from operations ($\displaystyle 1,21,000$) Less : Tax paid $\displaystyle (80,000)$ Net cash outflow/used in operating activities ($\displaystyle 2,01,000$) Dr. Provision for Tax A/c Cr. Particulars (₹) Particulars (₹) To Bank A/c $\displaystyle 80,000$ By Balance b/d $\displaystyle 2,10,000$ To Balance c/d $\displaystyle 2,04,000$ By Statement of Profit & $\displaystyle 74,000$ Loss $\displaystyle 2,84,000$ $\displaystyle 2,84,000$ Working Notes : Calculation of net profit before tax : (₹) Net Profit ($\displaystyle 2,85,000$) Add provision for Tax $\displaystyle 74,000$ ($\displaystyle 2,11,000$) ₹ $\displaystyle 18,000$ and consequently, net cash outflow/used in operating activities has been calculated as `$\displaystyle 2,07,000$) PART B OPTION-II (Computerised Accounting)