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Answer the followin… (Class 12 Accountancy SQP 2024-25, Q34)

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AccountancyCBSE Class 12 · Sample paper, session 2024-25 · 6 marks · Long answer

CBSE Class 12 Accountancy sample paper 2024-25: question 34

From the official CBSE sample question paper for 2024-25, section B-I, question 34, for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q34 · 6 marks · Long answerCash Flow Statement

Answer the following.

  1. (a)

    From the following information, calculate Cash flow from Operating Activities.

    Particulars31 March 202331 March 2024
    Surplus i.e Balance in Statement of Profit and Loss6,00,0005,00,000
    Provision for Tax1,00,0001,20,000
    Trade Receivables2,00,0002,40,000
    Trade Payables1,50,0002,00,000
    Goodwill2,00,0001,50,000

    Additional Information:-
    Proposed Dividend for the year ended March 31, 2023 and March 31, 2024 was ₹ 1,50,000 and ₹ 1,80,000 respectively.

    3 marks
  2. (b)

    From the following information calculate the Cash from Investing Activities

    Particulars31 March 202331 March 2024
    Machinery (Cost)20,00,00028,00,000
    Accumulated Depreciation4,00,0006,50,000

    Additional Information:-
    (i) Machinery costing ₹ 50,000 (Book Value ₹ 40,000) was lost by fire and insurance claim of ₹ 32,000 was received.
    (ii) Depreciation charged during the year was ₹ 3,50,000.
    (iii) A part of Machinery costing ₹ 2,50,000 was sold at a loss of ₹ 20,000.

    3 marks

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Last year's proposed dividend is paid this year; this year's is not yet a liability.

Hint 2

Use the accumulated depreciation account to find depreciation on the machine sold.

Hint 3

Insurance claim and sale proceeds are investing inflows.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. (a) Change in surplus = (₹ 1,00,000). Add back the dividend for 2022-23 paid this year ₹ 1,50,000 and tax provided ₹ 1,20,000: profit before tax = ₹ 1,70,000. Add goodwill written off ₹ 50,000: operating profit before working capital changes = ₹ 2,20,000.

    1 mark

  2. Add increase in trade payables ₹ 50,000; less increase in trade receivables ₹ 40,000: cash generated = ₹ 2,30,000. Less tax paid ₹ 1,00,000 (provision ₹ 1,00,000 + ₹ 1,20,000 − ₹ 1,20,000): cash flow from operating activities ₹ 1,30,000.

    2 marks

  3. (b) Accumulated depreciation: 4,00,000 + 3,50,000 − 10,000 (machine lost) − closing 6,50,000 = ₹ 90,000 on the machine sold. Machine sold: book value 2,50,000 − 90,000 = ₹ 1,60,000, sold at ₹ 20,000 loss for ₹ 1,40,000.

    Particulars₹Particulars₹
    To Balance b/d20,00,000By Accumulated Depreciation (machine lost)10,000
    To Bank A/c (purchases, balancing figure)11,00,000By Insurance claim32,000
    By Loss by fire8,000
    By Bank A/c (sale)1,40,000
    By Loss on sale20,000
    By Accumulated Depreciation (machine sold)90,000
    By Balance c/d28,00,000
    31,00,00031,00,000
    2 marks

  4. Investing activities: sale of machinery ₹ 1,40,000 + insurance claim ₹ 32,000 − purchase ₹ 11,00,000 = net cash used (₹ 9,28,000).

    1 mark

Answer: (a) Cash flow from operating activities ₹ 1,30,000; (b) net cash used in investing activities ₹ 9,28,000 (purchase ₹ 11,00,000, sale ₹ 1,40,000, insurance claim ₹ 32,000)

Where the marks are

  • Profit before tax and operating profit (1 mark)
  • Cash from operating activities ₹ 1,30,000 (2 marks)
  • Machinery account with purchase ₹ 11,00,000 (2 marks)
  • Cash used in investing activities ₹ 9,28,000 (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Cash Flow Statement, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.