AccountancyNEB 2080
From the following information calculate cash flow from operating activities under indirect method. Net Income Rs. 140,000 Increase in current Assets Rs. 80,000 Non operating expenses Rs. 40,000 [1]
1From the following information calculate cash flow from operating activities under indirect method.
- Net Income Rs. 140,000
- Increase in current Assets Rs. 80,000
- Non-operating expenses Rs. 40,000 [1]
Answer
To calculate Cash Flow from Operating Activities (Indirect Method), we adjust net income for non-cash items and changes in working capital:
- Start with Net Income: Rs. 140,000
- Add back Non-Operating Expenses: Rs. 40,000 → Adjusted Income = 140,000 + 40,000 = Rs. 180,000
- Subtract Increase in Current Assets (uses cash): → Cash Flow from Operations = 180,000 – 80,000 = Rs. 100,000
Final Answer: Rs. 100,000 (cash inflow from operations).
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