Financial Statements

Cash Flow

Medium

Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.

The other informations were :

Trade Payable showed an increase of Rs. 7,000.

Outstanding expenses showed a decrease of Rs. 5,000.

Accrued Income showed an increase of Rs. 8,000.

Trade payable showed a decrease of Rs. 10,000.

Inventories showed a decrease of Rs. 3,000.

On the basis of above infromation answer the following questions.

In the above case study if amount of Goodwill is increasing in current year, then if will be classified in :

Operating Activity

Investing Activity

Financing Activity

Cash and Cash Equivalents

✅ Correct Option: 2

An increase in goodwill on the Balance Sheet indicates goodwill was purchased during the year. Purchase of any fixed or intangible asset is treated as an outflow under Investing Activity in the Cash Flow Statement.

Question 41

If from the above informations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard :

Question 43

Find out Net Profit before tax from the above informations :

Question 44

We add depreciation in order to find out operating profit before working capital changes :

Question 45

Apast from showing interim dividend in Net Profit before tax, where else it will be shown ?

In the above case study if amount of Goodwill is increasing in current year, then if will be classified in :

Solution

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