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Home Questions HNWQ7H7UT6
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

Cash from Operating Activities before tax will be₹……………………

Options:

₹35,57,500

₹40,67,500

₹37,87,500

₹35,67,300

Correct Answer:

₹35,57,500

Explanation:

Cash from Operating Activities before tax= 39,67,500+1,00,000-5,10,000= Rs 35,57,500
Operating Profit before working capital Changes : 39,67,500
Add Increase in Current liabilities (Trade Payables) : 1,00,000
Less Increase in Current assets: (Prepaid Exp 2,50,000+inventory 2,30,000+Trade Receivables 30,000)=5,10,000

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