Question

Q3. Calculate cash flow from operating activities from the following data:                  

*Profits made during the year SAR. 145,000 after considering the following items:

             Amortization of Goodwill                                                                    3,000

             Depreciation of Fixed Assets                                                              17,000

             Loss on Sale of Fixed Assets                                                                2,500

             Transfer to General Reserve                                                               15,000

The following is the position of current assets and current liabilities:

Particulars	31.3.07	31.3.08
Creditors Debtors Prepaid Expenses Bills Payable	12,000 16,200 250 5,000	8,200 12,000 750 7,000

Answer 1

Solution 3:

Statement of Cash Flows (Partial)
For year ended December 31, 2008
Particulars	Details (In SAR)	Amount (In SAR)
Cash Flow from Operating Activities:
Net Income	145000
Adjustments to reconcile net income to net cash provided by operations:
Depreciation Expense	17000
Loss on sale of fixed asset	2500
Amortization of Goodwill	3000
Decrease in debtors ($16,200 - $12,000)	4200
Increase in prepaid expenses (750 - 250)	-500
Decrease in Creditors (12,000 - 8,200)	-3800
Increase in bills payable (7000 - 5000)	2000
Net Cash provided by operating activities		169400