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4.10 Analysis of Financial Statements—CBSE XII
3. Depreciation provided on Plant and Machinery was ` 14,50,000. A machine costing
` 21,00,000 was sold at profit of 20%.
Calculate Cash Flow from Operating Activities and Cash Flow from Investing Activities.
Solution: Atlas Ltd.
CASH FLOW STATEMENT for the year ended 31st March, 2024
Particulars `
(A) Cash Flow from Operating Activities
Surplus, i.e., Balance in Statement of Profit & Loss (Closing) 9,00,000
Less: Surplus, i.e., Balance in Statement of Profit & Loss (Opening) 5,00,000
Net Profit before Tax 4,00,000
Add: Patents Amortised (WN 2) 2,50,000
Goodwill Amortised (WN 1) 5,00,000
Depreciation 14,50,000
Loss on Sale of investment (WN 4) 2,00,000
Less: Gain (Profit) on Sale of Machinery (1,60,000)
Income from Investment (1,05,000) 25,35,000
Cash Flow from Operating Activities 25,35,000
(B) Cash Flow from Investing Activities
Purchase of Land (WN 3) (8,00,000)
Purchase of Investment (2,00,000)
Sale of Investment (WN 4) 8,00,000
Income from Investment 1,05,000
Purchase of Machinery (WN 5) (29,20,000)
Sale of Machinery (WN 5) 9,60,000
Purchase of Patents (5,00,000)
Purchase of Goodwill (WN 1) (2,50,000) (28,05,000)
Cash Used in Investing Activities (28,05,000)

Working Notes:
1. Dr. GOODWILL ACCOUNT Cr.
Particulars ` Particulars `

To Balance b/d 11,50,000 By Statement of Profit & Loss (Amortised) 5,00,000
To Bank A/c (Purchase) (Bal. Fig.) 2,50,000 By Balance c/d 9,00,000
14,00,000 14,00,000

2. Dr. PATENTS ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 9,00,000 By Statement of Profit & Loss (Amortised) 2,50,000
To Bank A/c (Purchase) 5,00,000 (Bal. Fig.)
By Balance c/d 11,50,000
14,00,000 14,00,000

3. Dr. LAND ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 2,50,000 By Balance c/d 10,50,000
To Bank A/c (Purchase) (Bal. Fig.) 8,00,000
10,50,000 10,50,000