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प्रश्न
Will 'Net decrease in working capital' other than cash and cash equivalents, increase, decrease or not change Cash Flow from Operating Activities? Give reason in support of your answer.
उत्तर
The net decrease in working capital or decrease in current assets with an increase in current liabilities or we can say an increase in assets is less than the increase in current liabilities. In both the cases, an outflow of cash would be involved. So, the net effect is decreased in cash flow from operating activities.
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संबंधित प्रश्न
Does movement between items that constitute cash or cash equivalents result into cash flow? Give reason in support of your answer.
'Interest received and paid' is considered as which type of activity by a finance company while preparing a Cash Flow Statement?
While preparing Cash Flow Statement, the accountant of a financing company showed 'Dividend Received Rs 50,000 on investments' as an investing activity. Was he correct in doing so? Give reason.
Which of the following transactions will result in the flow of cash :
(1) Deposited Rs 43,000 into the bank.
(2) Withdrew cash from bank Rs 23,000.
(3) Sale of the machinery of the book value of Rs 38,000 at a loss of Rs 3,000.
(4) Converted Rs 2,00,000, 9% debentures into equity shares.
While preparing 'Cash Flow Statement', the accountant of 'Jain Limited', a financing company, showed dividend received on investments as investing activity. Was he correct in doing so? Give reason.
Why is specific disclosure of cash flow financing activities important while preparing Cash Flow Statement?
J.K. Ltd. purchased machinery on deferred payment basis. During the year ended 31.3.2016 the company paid in instalment of Rs 4,00,000 which included interest of Rs 40,000. While preparing cash flow statement, under which type of activities will this payment be classified? Also, mention the amount involved in each activity.
State any two benefits of preparing 'Cash Flow Statement'.
While preparing Cash Flow Statements, What type of activity is ‘Payments of cash to aquire shares of another company by a trading company’.
Short Answer Question
“The nature/type of enterprise can change altogether the category into which a particular activity may be classified.” Do you agree? Illustrate your answer.
Long Answer Question
Explain the major Cash Inflows and outflows from financing activities.
Name the activities that constitute the primary or main activities of an enterprise?
Which one is Cash Inflows from investing activities?
Name the activities which is related to long-term funds or capital of an enterprise?
Which one is Cash Outflows from Financing activities?
Which of the following transactions will not result into flow of cash?
Statement of cash flows includes:
Which of the following is not an investing cash flow?
From the following Balance Sheets of Ronald Ltd., you are required to prepare a Cash Flow Statement (as per AS 3) for the year 2023-24.
| Balance Sheets of Ronald Ltd. As at 31st March, 2024 and 31st March, 2023 |
|||
| Particulars | Note No. | 31.03.2024 (₹) | 31.03.2023 (₹) |
| I. EQUITY AND LIABILITIES | |||
| 1. Shareholder's Funds | |||
| (a) Share Capital | 6,00,000 | 6,00,000 | |
| (b) Reserves and Surplus (Statement of P & L) | 80,000 | (60,000) | |
| 2. Non-Current Liabilities | |||
| Long Term Borrowings | 1,00,000 | 1,50,000 | |
| 3. Current Liabilities | |||
| (a) Short-term borrowings (Bank overdraft) | 1,75,000 | 22,000 | |
| (b) Short Term Provisions (Provision for Tax) | 15,000 | 28,000 | |
| Total | 9,70,000 | 7,40,000 | |
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| (a) Property, Plant & Equipment & Intangible Assets | |||
| (i) Property, Plant & Equipment (Plant & Machinery) | 5,50,000 | 6,40,000 | |
| (b) Non- Current Investments (7% Debentures of Violet Ltd.) | 1,40,000 | 50,000 | |
| 2. Current Assets | |||
| Cash & Bank Balance (Bank) | 2,80,000 | 50,000 | |
| Total | 9,70,000 | 7,40,000 | |
Additional information:
- The Debentures of Violet Ltd. were purchased on 31st March, 2024.
- During the year 2023-24:
- Tax of ₹ 20,000 was paid.
- Interest on all borrowings due and paid was ₹ 25,000.
