Page 114 - Corporate Finance PDF Final new link

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114 Corporate Finance BRILLIANT’S

Sale of capital stock / H¡${nQ>b ñQ>m°H$ H$s {~H«$s 75,000
Total Sources of Cash / Q>moQ>b H¡$e gmog© 2,75,000

Uses of Cash / H¡$e ¶yO
Purchase of merchandise for resale / nwZ…{~H«$s Ho$ {bE ‘mb H$m H«$¶ 1,20,000
Operating expenses / AmonqZJ E³gn|gog 56,000

Interest / ã¶mO 5,000
Taxes / Q>¡³g 7,000
Dividends / {S>{dS>oÝS> 12,000
Retirement of accounts payable bank
no¶~ob ~¢H$ AH$mC§Q²>g H$s [aQ>m¶a‘|Q> 15,000
Purchase of fixed assets / {’$³ñS> AgoQ²>g H$s IarXr 60,000

2,75,000
You are required to find out the net cash provided for operations from the above information.
AmnH$mo CnamoŠV gyMZm go Am°naoe§g Ho$ {bE àXmZ {H$`o J`o ZoQ> H¡$e H$mo kmV H$aZm h¡&
Solution:
Cash flow from operating activities: `
Cash receipts from customers 1,99,000
Less: Cash payments for
Purchase of merchandise for resale (120,000)
Operating expenses (56,000)
Retirement of accounts payable (15,000)
Cash generated from operations: 8,000
Less: Income tax paid (7,000)
Net cash flows from operating activities: 1,000
INDIRECT METHOD / BZS>m¶ao³Q> ‘oWS>

Illustration 2.2.3
Shashi Ltd. has presented the following Balance Sheets as at 31st December, 2017 and 2018.
e{e {b{_Q>oS> Zo 31 {Xg§~a 2017 VWm 2018 H$mo {ZåZ{b{IV ~¡b|g erQ> àñVwV H$s h¡&
Capital & Liabilities 2017 2018 Assets 2017 2018

(H¡${nQ>b Am¡a bm¶{~{bQ>rO) (`) (`) (AgoQ²>g) (`) (`)
Share Capital Building Less Depre. 5,00,000 4,80,000
(eo¶a H¡${nQ>b) 6,00,000 6,00,000 (õmg KQ>mZo Ho$ ~mX ^dZ)