What will be the cash from operating activities in the company's cash flow statement, if the net profits earned during the year are ₹50,000 and the amount of debtors at the beginning and the end of the year is ₹10,000 and ₹20,000 respectively?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹40,000.
Net profit = 50,000
Less: Increase in debtors (20,000-10,000) = 10000
= 50,000 - 10,000
= ₹40,000
Thus, cash from operating activities in the company's cash flow statement is ₹40,000.