Identify the amount of net cash flow from financing activities on the basis of following Information :
|
Particulars |
1st April 2022 |
31st March 2023 |
|
Equity Share Capital |
28,00,000 |
35,00,000 |
|
Bank Loan |
12,50,000 |
5,50,000 |
Bank loan raised during the year ₹2,00,000.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) - No flow of cash.
Equity share capital increased means it is a cash inflow.
Cash inflow from equity share capital = 35,00,000 - 28,00,000
= 7,00,000
Bank loan A/c
| Particulars | Amount | Particulars | Amount |
| To Bank A/c (Payment of loan) |
9,00,000 | By Bal b/d | 12,50,000 |
| To Bal c/d | 5,50,000 | By Bank A/c (Loan raised) |
2,00,000 |
| 14,50,000 | 14,50,000 |
Cash flow from bank loan = Outflow by paying loan - Inflow from raising of loan
= 9,00,000 - 2,00,000
= 7,00,000 (outflow)
Net Cash flow from financing activity = Cash inflow from equity - Cash outflow from bank loan
= 7,00,000 - 7,00,000
= 0
Net cash flow is 0 means there is no flow of cash from financing activity.
**** It is the previous year question. The correct ans is no flow of cash and there is no such option in the question, so we changed the 4th option.