CASH FLOW STATEMENT

GSC ltd. purchased a building for Rs. 5,00,000 and paid the consideration by issue of Equity Shares. Anil, the accountant, has prepared Cash Flow statement and shown the transaction as follows:

Investing Activity: Purchase of Building Rs. 5,00,000

Financing Activity: Issue of Equity Shares Rs. 5,00,000

Justify.

• The manner in which it is shown is not correct because there is neither inflow nor outflow of cash in this transaction.

• The manner in which it is shown is not correct because there is no inflow but outflow of cash is their in this transaction.

• The manner in which it is shown is correct because there is inflow and outflow of cash in this transaction.

• The manner in which it is shown is partially correct because outflow of cash will be recorded.

Dividend received is shown in Cash Flow Statement under:

• Operating Activity

• Investing Activity

• Financing Activity

• Cash and cash equivalents

Bank Overdraft or Cash credit is shown in Cash Flow Statement under:

• Operating Activity

• Financing Activity

• Cash and Cash Equivalents

• None of the above.

Amortisation of Goodwill is added while calculating

• Investing Activity

• Operating Activity

• Financing Activity

• Cas and Cash Equivalent

Identify Financing Activities out of the following transactions:

• Dividend paid to the shareholders.

• Receipt of loans and advances made.

• Brokerage paid for purchases.

• Interest paid on borrowings.

Increase in value of Goodwill will be shown under which activity:

• Operating

• Financing

• Investing

• None of the above

Spot the errors:

CALCULATION OF NPBT

Net Profit as per Surplus: Rs. 4,72,000

Add: Dividend paid : Rs 50,000

(Proposed dividend for the year ended 31st March 2018)

Add: Interim dividend paid: Rs 1,00,000

less: Provision for tax made during the year :Rs 1,50,000

Add: Transfer to General reserve Rs, 25,000.

• Add: Transfer to General reserve Rs, 25,000.

• Add: Interim dividend paid: Rs 1,00,000

• less: Provision for tax made during the year :Rs 1,50,000

• Add: Dividend paid : Rs 50,000

  (Proposed dividend for the year ended 31st March 2018)

A company that issues stocks and bonds to raise funds results in

• Decrease in Cash

• Increase in Cash

• Increase in Equity

• Increase in Liability

A corporation reported the following information for the past year:

Net Income: Rs 2,00,000

Depreciation expenses: Rs 30,000

Gain on sale of Truck: Rs. 5000

Proceeds from sale of Truck: Rs 8,000

Decrease in Bills Receivable: Rs 10,000

Assuming these are the only facts, what amount will the corporation report as the Net Cash Provided by Operating Activities on the cash flow statement?

• 2,25,000

• 2,53,000

• 2,35,000

• 2,45,000

If net profit is ₹ 35,000 after writing off good will ₹ 6,000 and loss on sale of furniture ₹ 1,000, cash flow from operating activities will be :

• 35,000

• 42,000

• 29,000

• 28,000