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For the year ended 31st… (Class 12 Accountancy 2026, Q34)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 6 marks · Long answer

CBSE Class 12 Accountancy 2026: question 34

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, 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

For the year ended 31st March 2025, Sona Ltd. made a profit of ₹ 4,00,000 after charging depreciation of ₹ 75,000 on fixed assets and a transfer of ₹ 1,50,000 to general reserve. Goodwill written off during the year was ₹ 80,000. The company sold machinery of the book value of ₹ 90,000 at ₹ 95,000. During the year, trade receivables increased by ₹ 40,000 and trade payables increased by ₹ 30,000. Prepaid expenses increased by ₹ 2,000 and outstanding wages decreased by ₹ 20,000.

Calculate cash flows from operating activities.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/1/1.

Hints

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

Hint 1

A transfer to reserve is an appropriation: add it back.

Hint 2

Gain on sale of machinery is an investing item to deduct.

Hint 3

Rising receivables and prepaid expenses, and falling outstanding wages, use cash.

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. Net profit before tax = profit ₹ 4,00,000 + transfer to general reserve ₹ 1,50,000 = ₹ 5,50,000.

    1 mark

  2. Add depreciation ₹ 75,000 and goodwill written off ₹ 80,000; deduct gain on sale of machinery (95,000 − 90,000) ₹ 5,000. Operating profit before working capital changes = ₹ 7,00,000.

    2 marks

  3. Cash flows from operating activities

    Particulars₹
    Net profit before tax5,50,000
    Add: Depreciation75,000
    Add: Goodwill written off80,000
    Less: Gain on sale of machinery(5,000)
    Operating profit before working capital changes7,00,000
    Add: Increase in trade payables30,000
    Less: Increase in trade receivables(40,000)
    Less: Increase in prepaid expenses(2,000)
    Less: Decrease in outstanding wages(20,000)
    Cash flows from operating activities6,68,000
    3 marks

Answer: Cash flows from operating activities ₹ 6,68,000 (operating profit before working capital changes ₹ 7,00,000)

Where the marks are

  • Net profit before tax ₹ 5,50,000 (1 mark)
  • Non-cash and non-operating adjustments to ₹ 7,00,000 (2 marks)
  • Working capital changes and result (3 marks)

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 paper2026 board paper, set 67/1/1: 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.