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M.462 An Aid to Accountancy—CBSE XII

23. (a) CASH FLOW FROM OPERATING ACTIVITIES

Particulars ` `
Profit before Tax 2,50,000
Add: Non-Cash and Non-operating Expenses:
Depreciation and Amortisation Expenses 60,000
Loss on Sale of Furniture 6,000 66,000
3,16,000
Less: Non-Operating Incomes:
Rent 60,000
Profit on Sale of Machinery 10,000
Interest on Debentures held as Investments 8,000 78,000
Operating Profit before Working Capital Changes 2,38,000
Add: Increase in Current Liabilities:
Outstanding Expenses 12,000
2,50,000
Less: Increase in Current Assets and Decrease in Current Liabilities:
Inventories 60,000
Trade Receivables 20,000
Prepaid Expenses 6,000
Trade Payables 10,000 96,000
Cash Flow from Operating Activities 1,54,000

(b) CASH FLOW FROM INVESTING ACTIVITIES
Particulars `
Proceeds from Sale of Plant and Machinery 40,000
Proceeds from Sale of Land (WN 1) 1,60,000
Purchase of Plant and Machinery (WN 2) (2,60,000)
Purchase of Non-Current Investments (` 1,00,000 – ` 40,000) (60,000)
Cash Used in Investing Activities (1,20,000)
Working Notes:
1. Dr. LAND ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 2,00,000 By Bank A/c (Balancing Figure)—Sale Proceeds 1,60,000
To Gain (Profit) on Sale of Land A/c 60,000 By Balance c/d 1,00,000
(Statement of Profit and Loss)
2,60,000 2,60,000

2. Dr. PLANT AND MACHINERY ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 8,50,000 By Depreciation A/c 50,000
To Bank A/c (Balancing Figure)—Purchase 2,60,000 By Bank A/c—Sale Proceeds 40,000
By Loss on Sale of Plant and Machinery A/c 20,000
(Statement of Profit and Loss)
By Balance c/d 10,00,000
11,10,000 11,10,000