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| 1. |
From the following information, calculate cash flow from operating activities using direct method. |
| Answer» <html><body><p></p>Solution :<img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P2_C06_S01_001_S01.png" width="80%"/> <br/>Working Notes: <br/>1. <a href="https://interviewquestions.tuteehub.com/tag/cash-910172" style="font-weight:bold;" target="_blank" title="Click to know more about CASH">CASH</a> Receipts from Customers is calculated as under :<br/> Cash Receipts from Customers = Revenue from Operations + Trade Receivables<br/> in the beginning – Trade Receivables in the <a href="https://interviewquestions.tuteehub.com/tag/end-971042" style="font-weight:bold;" target="_blank" title="Click to know more about END">END</a> <br/> = <a href="https://interviewquestions.tuteehub.com/tag/rs-625947" style="font-weight:bold;" target="_blank" title="Click to know more about RS">RS</a> 2,20,000 + Rs 33,000 – Rs 36,000<br/> = Rs 2,17,000<br/> 2. Purchases= Cost of Revenue from Operations – <a href="https://interviewquestions.tuteehub.com/tag/opening-1136658" style="font-weight:bold;" target="_blank" title="Click to know more about OPENING">OPENING</a> <br/> Inventory + Closing Inventory <br/> = Rs 1,20,000 – Rs 22,000 + Rs 27,000<br/> = Rs 1,25,000<br/>3.Cash payment to suppliers = Purchases + Trade Payables in the beginning – Trade Payables in the end<br/> = Rs 1,25,000 + Rs 17,000 – Rs 15,000<br/> = Rs 1,27,000<br/>4. Cash Expenses= Expenses on Accrual basis – Prepaid Expenses<br/>in the beginning and Outstanding Expenses in the end + Prepaid Expenses in the<br/>end and Outstanding Expenses in the beginning<br/> 5. Cash Paid to Employees = Rs 30,000 + Rs 2,000 – Rs 3,000<br/> = Rs 29,000<br/> 6.Cash Paid for Insurance Premium = Rs 8,000 – Rs 5,000 + Rs 5,500<br/>= Rs 8,500<br/>7.Income Tax Paid = Rs 10,000+Rs 3,000 – Rs 2,000<br/>= Rs 11,000<br/>8. It is <a href="https://interviewquestions.tuteehub.com/tag/important-1038039" style="font-weight:bold;" target="_blank" title="Click to know more about IMPORTANT">IMPORTANT</a> to note here that there are no extraordinary items.</body></html> | |