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Important Points
1. This Summary Sheet shall only be used for Quick Revision after you
have read the Complete Notes
4. Questions in the exam are concept based and reading only summary
sheets shall not be sufficient to answer all the questions
➢ Changes incurred related to operating, investing and financing activities in balance sheets of
a firm in a particular period would result in following changes in cash flows:
1. Increase in current assets apart from cash will decrease the cash
2. Decrease in current assets apart from cash will increase the cash
3. Increase in current liabilities apart from cash will increase the cash
4. Decrease in current liabilities apart from cash will decrease the cash
Solution:
Let us First Calculate the Cash Flow from Operating Activities
Head Amount
Now Net Profit after Tax 34000
Tax 6000
Net Profit Before Tax 40,000
Depreciation 0
Increase in Accounts Payable 5000
Increase in Accounts Receivable (36000)
Cash Generated by Operating 40,000+5,000-36000
Activities = 9000
Income Tax paid 6000
Since there was no cash on 1st January, so net cash on 31st December would be = 0 +
49000 = 49000
2 Work Sheets
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Worksheets on this topic. Work sheet consists of
This will give new dimensions to your learning and will test how much you can apply
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