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Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.
The other informations were: Trade Payable showed an increase of Rs. 7,000.
Outstanding expenses showed a decrease of Rs. 5,000.
Accrued Income showed an increase of Rs. 8,000.
Trade payable showed a decrease of Rs. 10,000.
Inventories showed a decrease of Rs. 3,000.
On the basis of above information answer the following questions.
Q. If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:
  • a)
    AS - 4
  • b)
    AS - 26
  • c)
    AS - 16
  • d)
    AS - 3
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs...
Explanation:

Cash Flow from Operating Activities under AS - 3:
- As per Accounting Standard (AS) - 3, cash flows from operating activities are derived using the indirect method, where net profit is adjusted for non-cash items and changes in working capital.
- The adjustments include adding back non-cash expenses like depreciation and amortization, deducting non-operating income like gain on sale of assets, and accounting for changes in working capital items like trade payables, outstanding expenses, and accrued income.

Adjustments for Cash Flow Calculation:
- Profit after adjustments: Profit of Rs. 72,000 + Depreciation Rs. 17,000 - Amortization of Goodwill Rs. 12,000 - Gain on sale of furniture Rs. 2,500 = Rs. 74,500.
- Adjustments for working capital changes:
- Trade Payable: Increase of Rs. 7,000 + Decrease of Rs. 10,000 = Rs. 3,000.
- Outstanding expenses: Decrease of Rs. 5,000.
- Accrued Income: Increase of Rs. 8,000.
- Inventories: Decrease of Rs. 3,000.

Calculation of Cash Flow from Operating Activities:
- Net Profit after adjustments: Rs. 74,500.
- Adjustments for working capital changes: Rs. 3,000 (Net change in working capital).
- Cash Flow from Operating Activities = Net Profit after adjustments + Adjustments for working capital changes.
- Cash Flow from Operating Activities = Rs. 74,500 + Rs. 3,000 = Rs. 77,500.
Therefore, the Cash Flow from Operating Activities is ascertained according to AS - 3, which focuses on presenting the cash flows generated from the core operating activities of the business.
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Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs...
AS – 3 is used for cash flow statement.
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Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer?
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Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer?.
Solutions for Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Humanities/Arts. Download more important topics, notes, lectures and mock test series for Humanities/Arts Exam by signing up for free.
Here you can find the meaning of Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were: Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.On the basis of above information answer the following questions.Q.If f rom the abov e inf ormations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:a)AS - 4b)AS - 26c)AS - 16d)AS - 3Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice Humanities/Arts tests.
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