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Practice Test Papers PTP.9

Answers to Practice Test Paper 1

1. It will be shown under the head ‘Operating Activity’ as Extraordinary Item.
2. It will be shown under ‘Investing Activity’, it being an investment and purchase of
securities not for resale.
3. (i) Finance Costs
(ii) Finance Costs
(iii) Depreciation and Amortisation Expenses
(iv) Other Income
4. (a) Current Assets should be increased by ` 2,50,000.
(b) Debt should be paid = ` 5,00,000.
5. Inventory Turnover Ratio: 2023 – 5.56 Times and 2024 – 6 Times.
6. Cash Flow from Operating Activities = ` 1,37,000.
Cash Used in Investing Activities = ` 92,000.
Cash Flow from Financing Activities = ` 20,000.
Net Increase in Cash and Cash Equivalents = ` 65,000.