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Using the data given in Illustration 1, calculate cash flows from operating activities using indirect method. |
Answer» Solution : You will notice that the amount of cash FLOWS from operating ACTIVITIES are the same whether we USE direct method or indirect method for its CALCULATION. Working Notes : The net profit before taxation and extraordinary items has been WORKED out as under: Net Profit = Rs 32,000 + Income Tax = Rs 10,000 = Net Profit before Tax and Extraordinary Items = Rs 42,000 |
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