CBSE Class 12 Accountancy 2026: question 34
Set in the CBSE Class 12 board exam of 2026, paper 67/5/1, 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
From the following information obtained from the books of 'Informatics India Ltd.', calculate 'Cash from Operations' :
Net Profit for year ended 31st March, 2025 after providing depreciation ₹ 60,000 and after writing off goodwill ₹ 2,000 was ₹ 3,40,000.
Additional Information :
| Particulars | 31.3.2024 (₹) | 31.3.2025 (₹) |
|---|---|---|
| Rent received in advance | 20,000 | 10,000 |
| Accrued interest | 30,000 | 40,000 |
| Prepaid insurance | 15,000 | 20,000 |
| Outstanding salary | 25,000 | 40,000 |
| Trade receivables | 1,24,000 | 1,25,000 |
| Trade payables | 1,30,000 | 1,50,000 |
| Inventory | 50,000 | 80,000 |
| Other current assets | 1,00,000 | 1,20,000 |
Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/5/1.
Hints
Open one hint at a time and try again before the next.
Hint 1
Add back depreciation and goodwill written off.
Hint 2
An increase in a current liability adds to cash; an increase in a current asset uses cash.
Hint 3
Income received in advance falling means less cash came in.
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 mark
Net profit ₹ 3,40,000 (taken as given; no tax data).
- 1 mark
Add non-cash items: depreciation ₹ 60,000 and goodwill written off ₹ 2,000 = ₹ 62,000. Operating profit before working capital changes = ₹ 4,02,000.
- 4 marks
Calculation of cash from operations
Particulars ₹ Net profit 3,40,000 Add: Depreciation 60,000 Add: Goodwill written off 2,000 Operating profit before working capital changes 4,02,000 Add: Increase in trade payables 20,000 Add: Increase in outstanding salary 15,000 Less: Decrease in rent received in advance (10,000) Less: Increase in accrued interest (10,000) Less: Increase in trade receivables (1,000) Less: Increase in prepaid insurance (5,000) Less: Increase in inventory (30,000) Less: Increase in other current assets (20,000) Cash generated from operations 3,61,000
Answer: Cash from operations ₹ 3,61,000 (operating profit before working capital changes ₹ 4,02,000)
Where the marks are
- Net profit (1 mark)
- Non-cash items added (1 mark)
- Each working capital change (½ mark each, 4 marks)
Revise the chapter
- Chapter: Cash Flow Statement (notes, formulas, where marks are lost and every past question)
- Topic: Cash Flow from Operating Activities (Indirect Method)
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