Question : Sun pharma Ltd., reported Net Profit after Tax of Rs. 6,10,000 for the year ended 31 st March, 2020. The relevant extract from Balance Sheet as at 31 st March, 2020 is: Particulars 31st march, 2020(Rs) 31st march, 2019(Rs) Inventories 1,15,000 1 ...

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Question : Sun pharma Ltd., reported Net Profit after Tax of Rs. 6,10,000 for the year ended 31 st March, 2020. The relevant extract from Balance Sheet as at 31 st March, 2020 is:

Particulars 31st march, 2020(Rs) 31st march, 2019(Rs)

Inventories 1,15,000 1,25,000

Prepaid Expenses 20,000 6,000

Trade Payables 1,10,000 80,000

Provision for Tax 20,000 15,000

Depreciation charged on Plant and Machinery Rs. 55,000, tax provided during the year Rs 15,000 and insurance claim received Rs. 50,000, gain (profit) on sale of investment Rs. 20,000 appeared in the Statement of Profit and Loss for the year ended 31st March, 2020.

Cash Flow from Operating Activities are ____________.
Option 1: Rs 6,36,000
Option 2: Rs 6,66,000
Option 3: Rs 6,96,000
Option 4: Rs 6,86,000

Team Careers360 25th Jan, 2024

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Answer (1)

Team Careers360 27th Jan, 2024

Correct Answer: Rs 6,86,000

Solution : Answer = Rs 6,86,000

Provision for tax a/c
To Cash(paid)	1,000	By Bal b/d	15,000
To bal c/d	20,000	By tax provided	15,000
	30,000		30,000

N.P After charging Tax and Extraordinary items	6,10,000
(+) Tax charged	15,000
(-) Insurance claim received	(50,000)
NP Before tax and Extraordinary items	5,75,000

Cash flow from operating activities
NP before tax	5,75,000
(+) Dep	55,000
(-) Profit on sale of fixed asset	(20,000)
op. Profit Before the Change in Working Capital	6,10,000
(+)Decrease in CA/ Increase in CL
Inventories=10,000
Tax payable=30,000	40,000
(-)Increase in CA/ Decrease in CL(Prepaid expenses)	(14,000)
(+)Insurance claim received	50,000
Operating profit before a change in working capital	6,86,000

Hence, the correct option is 4.

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