Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Wye Ltd. has Operating Profit before working Capital Changes of Rs 1,60,000. Other information available is as follows-
i. Increase in Trade Receivables - 10,000
ii. Increase in Trade Payables - 5,000
iii. Decrease in Prepaid Expenses - 7,000
iv. Decrease in Outstanding Liabilities - 4,000
Calculate Cash flow from Operating Activities.

Options:

₹1,58,000

₹1,62,000

₹1,64,000

₹1,56,000

Correct Answer:

₹1,58,000

Explanation:

Operating Profit before working Capital Changes - Rs 1,60,000
Add : Decrease in Current Assets & Increase in Current Liabilities ( 7,000+5,000) = 12,000
Less: Increase in Current Assets & Decrease in CL (10,000 + 4,000) = 14,000
Cash Flow from Operating Activities = 1,58,000