Cash flow statement practical problems and solutions are prepared by our professional accounting team for the students to get clear their concepts and prepare for their exams and interviews.
Problem No. 1
From the summarized cash book of Zenith Ltd. calculate net cash flow from operating activities.
Summarized Cash Book
|To Balance b/d||150,000||By Repayment of bank loan||450,000|
|To Sale of Machinery||1,350,000||By Purchase of Machinery||1,200,000|
|To Receipts from debtors||9,000,000||By Payment to creditors||7,800,000|
|To Issue of shares||3,000,000||By Dividends||300,000|
|By Wages and Salaries||600,000|
|By Rent, rates and tax||300,000|
|By Income tax||150,000|
|By Balance c/d||2,700,000|
Calculate of Net Cash Flow from Operating Activities ( Direct Method)
|Cash received from debtors||9,000,000|
|Other cash receipts||–|
|Less: Cash paid to creditors||7,800,000|
|Cash paid to employees (wages and salaries)||600,000|
|Other cash expenses (rent, rates and tax)||300,000||8,700,000|
|Cash generated from operation||300,000|
|Less: Income tax paid||150,000|
|Net Cash flow from operating activities||150,000|
From the following profit and loss account of Samarth Ltd. calculate net cash flows from operating activities.
|To Depreciation||40,800||By Gross Profit||394,400|
|To Rent||72,000||By Profit on sale of building||53,600|
|To administrative expenses||48,000||By Profit on sale of furniture||50,400|
|To Salaries||64,000||By Income Tax Refund||18,400|
|To Loss on sale of plant||12,800|
|To provision for bad debts||64,000|
|To Goodwill written off||34,400|
|To Loss on sale of machinery||19,600|
|To Provision for tax||24,000|
|To proposed Dividend||48,000|
|To Net Profit||89,200|
Calculation of Net Cash Flow from Operating Activities
Problem No. 3
From the following information extracted from the book of Max Ltd. for the year 2019-20, calculate net cash flow from investing activities.
- Depreciation charged o furniture during the year was $10,000
- Depreciation on machinery charged during the year was $25,000
- Machinery, the book value of which was $80,000 sold for $75,000
- Land was sold at a profit of $90,000
Note: $190,000 indicates cash outflows are more than inflows.
Problem No. 4
The following information is submitted to you by Hema Enterprises Pvt. Ltd. Calculate net cash flow from investing activities.
Information relating to assets sold during the year 2020.
- Furniture costing $100,000 (accumulated depreciation $20,000) was sold for $70,000.
- Machinery costing $100,000 (accumulated depreciation $30,000) was sold for $80,000.
Calculation of Net Cash flow from Investing Activities
Note: Cash outflows are more than cash inflows ($410,000).
Accumulated Depreciation Account (Furniture)
Accumulated Depreciation (Machinery)
Problem No. 5
From the following information by Tarapoore Ltd, calculate net cash flows from financing activities for the year 2019-20.
Note: Interest on debentures paid during the year was $30,000 and on bank loan $40,000.
Calculation of Net Cash Flows from Financing Activities
Problem No. 6
Base Ltd provides the following information to you. Calculate net cash flows from financing activities for the year 2019-20.
- The company has issued 5,000 bonus shares during 2019-20 to the shareholders at the face value.
- Interest on debentures paid, in total, during the year was $60,000.
- Interest on bank loan paid during the year $25,000.
- Dividend paid during the year was $120,000.
Cash Flows from Financing Activities