T S Grewal Solutions 2026-27 [Class 12] – Cash Flow Statements– Q 11 to 20

Solution for Q 11 to 20 of Chapter 5 of Book 3 - Analysis of Financial Statements of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Cash Flow Statements class 12. These Solutions are based on topics Calculation of net profit before tax and extra ordinary items and calculation of operating profit before working capital changes, calculation of cash flow from operating activities

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.

These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 11

Add/Less	Description	Amount
	Balance in Surplus as on 31-Mar-2025	80000
Less	Balance in Surplus as on 31-Mar-2024	60000

	Addition to Surplus in 2024-2025	20000
Add	Dividend paid in the current year	0
Add	Interim Dividend	0
Add	Transfer to General Reserve	0
Add	Provision for Tax	0
		20000

Less	Refund of Tax	0

	NP before tax and extra ordinary items	20000

Add	Non Cash and non operating Expenses
	Depreciation for the year	10000
	Goodwill written off/Goodwill Amortization	8000

Less	Non Cash and non operating Income	0

	Operating Profit before working capital changes	38000

Add	Decrease in Current Assets
	Trade Receivables (31000-25000)	6000
	Prepaid Insurance (2000-1000)	1000

Less	Increase in Current Assets
	Inventories (80000-60000)	20000
Less	Decrease in Current Liabilities
	Outstanding Rent (21000-12000)	9000
	Trade Payables (19000-13000)	6000

	Cash Generated from operations	10000
	(38000+6000+1000-20000-9000-6000)

	Cash flow from operating activities	10000

▶ Video Solution: Coming Soon

Question 12

Add/Less	Description	Amount
	NP after prov for tax and payment of dividend	215000

Add	Dividend paid in the current year	50000
Add	Provision for Tax	45000
Less	Refund of Tax	30000
Less	Extra ordinary Income	0

	Net Profit before tax and extra ordinary items	280000

Add	Non Cash and non operating Expenses
	Depreciation for the year	25000
	Patents amortised	30000
	Loss on sale of machinery	10000

Less	Non Cash and non operating Income
	Gain on sale of land	70000

	Operating Profit before working capital changes	275000

Add	Decrease in Current Assets	0
Add	Increase in Current Liabilities	0

Less	Increase in Current Assets	0
Less	Decrease in Current Liabilities	0

	Cash Generated from operations	275000
Less	Prov for tax (assumed as tax paid)	45000
Add	Refund of tax	30000

	Cash Flow from Operating Activities	260000

▶ Video Solution: Coming Soon

Question 13

Add/Less	Description	Amount
	NP after charging dep. and transfer to reserve	100000

Add	Transfer to General Reserve	30000
		130000
Less	Refund of Tax	0
	Net Profit before tax and extra ordinary items	130000

Add	Non Cash and non operating Expenses
	Depreciation for the year	20000
	Goodwill amortised	7000

Less	Non Cash and non operating Income
	Gain on sale of machinery	3000

	Operating Profit before working capital changes	154000

Add	Increase in Current Liabilities
	Trade Payables	6000

Less	Increase in Current Assets
	Trade Receivables	3000
	Prepaid Expenses	200

Less	Decrease in Current Liabilities
	Outstanding Expenses	2000

	Cash Generated from operations	154800

	Cash Flow from operating activities	154800

▶ Video Solution: Coming Soon

Question 14

Add/Less	Description		Amount
	Profit for the year		700000

Add	Transfer to General Reserve		60000
			760000
Less	Refund of Tax		0
	Net Profit before tax and extra ordinary items		760000

Add	Non Cash and non operating Expenses
	Depreciation for the year		40000
	Goodwill written off (amortised)		20000

Less	Non Cash and non operating Income
	Gain on sale of land		90000

	Operating Profit before working capital changes		730000

Add	Decrease in Current Assets
		Prepaid Expenses	8000

Less	Increase in Current Assets
		Trade Receivables	15000

Less	Decrease in Current Liabilities
		Trade Payables	25000

	Cash Generated from operations		698000

	Cash flow from operating activities		698000

▶ Video Solution: Coming Soon

Question 15

Add/Less	Description	Amount
	Surplus	400000
Add	Equity shares Dividend paid in the current year	240000
	(3000000*8/100)
Add	Preference share Dividend	20000
	(200000*10/100)
		660000
Less	Refund of Tax	0
	Net Profit before tax and extra ordinary items	660000

Add	Non Cash and non operating Expenses
	Interest on Debentures	100000
	(1000000*10/100)

	Operating Profit before working capital changes	760000
	No Working Capital Changes as per question
	Cash Generated from operations	760000
	No Tax paid or Extra Ordinary items as per question	0

	Cash Flow from Operating Activities	760000

Note : It is assumed that the equity dividend is the interim dividend for current year

and hence calculated on current year share capital (3000000*8/100)

Note : Since dividend on equity shares is paid as per question so it is assumed

that Preference share dividend is also paid

▶ Video Solution: Coming Soon

Question 16

Add/Less	Description	Amount
	Net profit after tax	640000

Add	Provision for Tax	20000
		660000

Less	Insurance claim received	50000
	(Extra Ordinary Income)

	Net Profit before tax and extra ordinary items	610000

Add	Non Cash Expenses
	Depreciation for the year	55000

Less	Non Operating Income and Gains
	Gain on sale of investment	20000

	Operating Profit before working capital changes	645000

Add	Decrease in Current Assets
	Inventories	10000

	Increase in Current Liabilities
	Trade Payables	30000

Less	Increase in Current Assets
	Trade Receivables	40000
	Prepaid Expenses	14000

	Cash Generated from operations	631000

Less	Income tax paid	15000
	Cash Flow from operating activities before	616000
	extraordinary items

Add	Extraordinary Items
	Insurance Claim Received	50000

	Cash Flow from Operating Activities	666000

Note :

Insurance claim received will first be deducted to calculate Net Profit before tax

and extra ordinary items.

Later it will be added back in the end as it is related to operating activities

▶ Video Solution: Coming Soon

Question 17

Add/Less	Description	Amount
	Net profit after depreciation	10000
	No Adjustments as per question
	Net Profit before tax and extra ordinary items	10000

Add	Non Cash Expenses
	Depreciation for the year	2000
	Provision for Doubtful debts	200

	Operating Profit before working capital changes	12200

Add	Decrease in Current Assets
	Prepaid Expenses	1000

	Increase in Current Liabilities
	Trade Payables	2000
	Expenses Payable	500

Less	Increase in Current Assets
	Trade Receivables	1000
	Inventories	3000
	Other Current Assets	2000
	Accrued Income	1000
	Decrease in Current Liabilities
	Income received in advance	1000

	Cash Generated from operations	7700

Less	Income tax paid	0
	Cash flow from operating activities before	7700
	extraordinary items

Add	Extraordinary Items	0

	Cash Flow from Operating Activities	7700

▶ Video Solution: Coming Soon

Question 18

Add/Less	Descrption	Amount
	Net profit	800000
Add	Dividend paid in the current year	110000
Add	Provision for Tax	110000
		1020000

Less	Refund of Tax	10000
Less	Compensation for natural disaster	75000

	Net Profit before tax and extra ordinary items	935000

Add	Non Cash Expenses
	Depreciation for the year	150000
	Loss on sale of investment	30000

Less	Non Operating Income and Gains
	Gain on sale of land	90000
	Dividend Received	20000

	Operating Profit before working capital changes	1005000

Add	Decrease in Current Assets	40000
	Increase in Current Liabilities	70000

Less	Increase in Current Assets	60000
	Decrease in Current Liabilities	10000

	Cash Generated from operations	1045000

Less	Income tax paid	120000
Add	Income Tax Refund	10000
	Cash flow from operating activities before	935000
	extraordinary items

Add	Extraordinary Items
	Compensation for natural disaster	75000

	Cash Flow from Operating Activities	1010000

▶ Video Solution: Coming Soon

Question 19

Add/Less	Description	Amount
	Net profit	180000

Add	Provision for Tax	64000
		244000
Less	Refund of Tax	0
	Net Profit before tax and extra ordinary items	244000

Add	Non Cash Expenses
	Depreciation and amortization for the year	185000
	Loss on sale of assets	36000

Less	Non Operating Income and Gains
	Gain on sale of plant	40000
	Dividend Received	5000

	Operating Profit before working capital changes	420000

Add	Increase in Current Liabilities
	Trade Payables	28000
	Selling expenses outstanding	3000

Less	Increase in Current Assets
	Trade Receivables	37000
	Inventories	16000

Less	Decrease in Current Liabilities
	Office Expenses Outstanding	5000

	Cash Generated from operations	393000

Less	Income tax paid	64000

	Cash Flow from Operating Activities	329000

Note :

It is assumed that the provision made in the current year for tax is paid

▶ Video Solution: Coming Soon

Question 20

Add/Less	Description	Amount
	Net profit	100000

Add	Provision for Tax	80000

	Net Profit before tax and extra ordinary items	180000

Add	Non Cash Expenses
	Depreciation for the year	195000
	Loss on sale of assets	120000
	Goodwill Written Off	60000

	Operating Profit before working capital changes	555000

Add	Increase in Current Liabilities
	Trade Payables	40000

Less	Increase in Current Assets
	Trade Receivables	200000
	Inventories	50000

	Cash Generated from operations	345000

Less	Income tax paid	60000

	Cash Flow from Operating Activities	285000

Note :

Prov for tax for current year is added to find net profit before tax

Prov for tax for last year is assumed to be paid this year

Machinery A/c
Particulars	Amount	Particulars	Amount
To Balance B/d	1000000	By Balance C/d	1850000
		By Acc Depreciation A/c	45000
To Bank A/c	1150000	By Bank A/c (sale)	135000
(New Purchases)		By Loss on Sale	120000

Total	2150000		2150000

Accumulated Depreciation A/c
Particulars	Amount	Particulars	Amount
To Balance C/d	250000	By Balance B/d	100000
To Machinery A/c	45000	By Depreciation A/c	195000
		(Bal Figure)

Total	295000		295000

Loss on sale of Machinery
Cost of Machinery		300000
Less - Acc Dep		45000

Book Value		255000
Sale Value		135000

Loss on Sale		120000

▶ Video Solution: Coming Soon

Q 1-10 | Q 11-20 | Q 21-30 | Q 31-40 | Q 41-52

T S Grewal Solutions – Cash Flow Statements – All Questions

T S Grewal Solutions Class 12 2026-27 – All Chapters

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