Need Solutions for T S Grewal 'Cash Flow Statement' for your Class 12 Accounts exams? We've got you covered! Below you will find clear explanations and solutions for all the T S Grewal Cash Flow Statement questions (Q Nos 31 to 40) following the latest CBSE/ICSE/State Boards curriculum (2024-2025).
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which tax is subtracted at the end of the cash flow (provison for tax given in b/s or tax paid during the year or tax provided which we calculate)
The answer to your query is :
Short answer is the tax paid is deducted.
Explanation for complete provision for taxation adjustment in cash flow statement is as follows :
Case 1 : When only provision for taxation opening and Closing balance is given in question
The provision made for Current year is added while calculating Net Profit before tax and extraordinary items.
The Provision made for previous year is considered paid during the year and hence deducted at the end of cash flow statement
Case 2 : When provision for taxation opening and Closing balance and one of the following is given in question
a) Provision made during the year or
b) Tax paid during the year
In such a case we will not assume anything and we will prepare the provision for the taxation account. In such cases questions will always give an opening and closing balance of provision for taxation. Then one out of tax paid or provision made during the year will be given. So a total 4 items will be there. Find out the fourth one by preparing the account.
c) Please note that tax refund is not at all related to provision for taxation. It’s treatment will be as follows :
Deduct from Net Profit before tax and extraordinary items
Add Later in end in cash flow from operating activities