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Home Questions AV7JMGPBY8
Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Study the information given below carefully and answer the following question.
Radhika an alumni of IIM Bangalore initiated her startup Radhika Ltd. in 2020. The profits of Radhika Ltd in the year 2021-2022 after all appropriations was ₹ 31,25,000. This profit was arrived after taking into consideration the following items:-

Sl No Particulars Amount ( In Rs)
1 Gain of sale of assets 12,50,000
2 Goodwill written off 7,80,000
3 Transfer to general Reserve 8,75,000
4 Provision for taxation 4,37,500

 

Additional Information

Sl No Particulars 31.03.2022 (In Rs) 31.03.2021 (In Rs)
1 Prepaid Expenses 7,50,000 5,00,000
2 Inventory 10,50,000 8,20,000
3 Trades Payable 4,50,000 3,50,000
4 Trade Receivable 6,20,000 5,90,000

Operating profit before working capital changes will be ₹……………………

Options:

₹52,17,500

₹64,67,500

₹39,67,500

₹39,69,500

Correct Answer:

₹39,67,500

Explanation:

Operating profit before working capital changes= Rs 39,67,500 (44,37,500+7,80,000-12,50,000)
Net Profit/Loss before Tax and Extraordinary Items: =44,37,500 (31,25,000+8,75,000+4,37,500)
Add : Deductions already made in Statement of Profit and Loss on account of Non-cash items such as Depreciation, Goodwill to be Written-off- 7,80,000
Less: Additions (incomes) made in Statement of Profit and Loss on Account of Non-operating items such as Dividend received, Profit on sale of Fixed Assets- 12,50,000

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