Question

Compute cash generated from Operations during the year 2021-22, from  the following data:  

Particulars   April 1, 2021 March 31, 2022
Sundry debtors   R. 30,000 R. 40,000
Sundry creditors   48,000 30,000
Outstanding expenses   3,000 6,000
Outstanding income   1,000 1,000
Stock in trade   55,000 60,000
Prepaid expenses   3,000 2,000
Accumulated depreciation      
(no retirements during the year)   50,000 60,000
Provision for doubtful accounts   1,500 2,000
Dividends payable   -- 3,000
Bills receivable   10,000 12,000
Bills payable   8,000 6,000
Net income before taxes (as per profit and loss -- 80,000
22 Feb 2023
Answer :
Word Count : 602

To calculate cash generated from operations, we need to use the indirect method and adjust net income for non-cash items and changes in working capital.

First, we need to calculate the changes in working capital:

Change in sundry debtors = 40,000 - 30,000 = 10,000
Change in sundry creditors = 30,000 - 48,000 = -18,000 (Note: negative change means decrease in current liability, which is a source of cash)
Change in outstanding expenses = 6,000 - 3,000 = 3,000
Change in outstanding income = 1,000 - 1,000 = 0
Change in stock in trade = 60,000 - 55,000 = 5,000
Change in prepaid expenses = 2,000 - 3,000 = -1,000 (Note: negative change means decrease ___ _________ _______ __________ ____ _______ ______ __________ __________ ___ ________.
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Compute cash generated from Operations during the year 2021-22, from  the following data:  

Particulars   April 1, 2021 March 31, 2022
Sundry debtors   R. 30,000 R. 40,000
Sundry creditors   48,000 30,000
Outstanding expenses   3,000 6,000
Outstanding income   1,000 1,000
Stock in trade   55,000 60,000
Prepaid expenses   3,000 2,000
Accumulated depreciation      
(no retirements during the year)   50,000 60,000
Provision for doubtful accounts   1,500 2,000
Dividends payable   -- 3,000
Bills receivable   10,000 12,000
Bills payable   8,000 6,000
Net income before taxes (as per profit and loss -- 80,000

Explain the following Accounting concepts
a) Business entity concept
b) Accrual concept
c) Money measurement concept
d) Periodicity concept 

 

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