Page 10 - 27. COMPILER QB - IND AS 7

SOLUTION

Statement Cash Flows from operating activities of Galaxy Ltd. for the year ended 31 March 20X2 (Direct
Method)
Particulars Rs. Rs.

Operating Activities:
Cash received from Trade receivables (W.N. 3) 85,33,000

Less: Cash paid to Suppliers (W.N.2) 55,75,000
Payment for Administration and Selling expenses 15,40,000

Payment for Income Tax (W.N.4) 1,12,000 (72,27,000)
13,06,000

Adjustment for exceptional items (fire insurance claim) 1,10,000
Net cash generated from operating activities 14,16,000
Working Notes:

1. Calculation of total purchases
Cost of Sales = Opening stock + Purchases – Closing Stock
Rs. 56,00,000 = Rs. 1,65,000 + Purchases – Rs. 1,20,000
Purchases = Rs. 55,55,000

2. Calculation of cash paid to Suppliers
Trade Payables
Rs. Rs.
To Bank A/c (balancing figure) 55,75,000 By Balance b/d 2,15,000
To Balance c/d 1,95,000 By Purchases 55,55,000
(W.N. 1)
57,70,000 57,70,000

3. Calculation of cash received from Customers
Trade Receivables
Rs. Rs.

To Balance b/d 1,88,000 By Bank A/c (balancing figure) 85,33,000
To Sales 85,50,000 By Balance c/d 2,05,000
87,38,000 87,38,000

4. Calculation of tax paid during the year in cash
Provision for tax
Rs. Rs.

To Bank A/c (balancing figure) 1,12,000 By Balance b/d 65,000
To Balance c/d 48,000 By Profit and Loss A/c 95,000
1,60,000 1,60,000

27. 9