READ THE FOLLOWING PASSAGE AND ANSWER THE FOLLOWING QUESTION.

The profit of a company is ₹90000 after taking into account the following items:

Calculate net cash generated from operating activity while preparing the cash flow statement.

₹2,30,000

The correct answer is option 4- ₹2,30,000.

Net profit = 90,000
+ Patents written off = 40,000
- Profit on sale of asset = 10,000
+ Depreciation = 40,000
+ Interest on debentures = 40,000
TOTAL = 90,000 +40,000 - 10,000 + 40,000 + 40,000
          = ₹2,00,000

+ Decrease in current assets:
    Debtors = 20,000
+ Increase in current liabilities:
     Creditors = 20,000
- Increase in current assets:
     Bills receivables = 10,000

Net Operating profit  = 2,00,000 + 20,000 + 20,000 - 10,000
                                  = ₹2,30,000