If net profit is ₹35,000 after writing off goodwill ₹6,000 and loss on sale of computer ₹2,000, cash flow from operating activities will be: |
₹35,000 ₹37,000 ₹41,000 ₹43,000 |
₹43,000 |
The correct answer is option 4- ₹43,000. To calculate cash flow from operating activities using the indirect method, we have to start with net profit and then adjust for non-cash expenses and losses. In this case, we have to add back the goodwill write-off and the loss on the sale of a computer to the net profit. Net Profit = ₹35,000 |