[CBSE] Q. 1 Cash Flow Statement TS Grewal Class 12 2023-24

Are you looking for the solution of Question number 1 of the Cash Flow Statement of TS Grewal Book 2023-24 session?

Identify the transactions as belonging to (i) Operating Activities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash and Cash Equivalents:

(a) Cash Sale of Goods

(b) Cash Received against Revenue from Services rendered

(c) Cash Purchase of Goods

(d) Cash Paid against Services Taken

(E) Patents Purchased

(f) Marketable Securities

(g) Bank Overdraft

(h) Proceeds from Issue of Debentures

(i) Purchase of Shares

(j) Repayment of Long-term Loan

(k) Commission Received

(L) Redemption of Debentures

(m) Interest on Debentures

(n) Interest on Investments

(o) Income Tax Paid

(p) Income Tax paid on Gain (Profit) on Sale of Asset

(q) Cash Received from Debtors

(r) Cash Paid to Creditors.

[Ans.: Operating Activities: (a), (b), (c), (d), (k), (o), (q), (r); Investing Acitivities: (e), (i), (n) (p); Financing Activities: (g), (h), (j), (l), (m); Cash and Cash Equivalents; (f).]

Solution:-

a) Cash Sale of Goods:- It is the Operating Activity as it is the principal revenue activity of the business.

b) Cash Received against Revenue from Services Rendered:- It is the operating activity as it is the principal revenue activity of the business.

c) Cash Purchase of Goods:- It is the Operating Activity as it is the principal activity of the business.

d) Cash Paid against Services Taken:- It is the operating activity as it is the principal activity of the business.

e) Patents Purchased:- It is the Investing activity of the firm, as selling and purchasing assets are the investing activities of the firm.

f) Marketable Securities:- Marketable securities are cash equivalents that can be readily converted into cash on demand.

g) Bank Overdraft:- It is the loan taken to finance the business activities. It is considered a financing activity.

h) Proceeds from issue of debentures:- It is a loan raised from the public. It is considered a financing activity.

i) Purchase of shares:- The issue of shares is the financing activity.

j) Repayment of long-term loan:- Financing Activity.

k) Commission Received:- Operating Activity

l) Redemption of Debentures:- Financing Activity

m) Interest on Debentures:- Financing Activity

n) Interest on Investments:- Investing Activity

o) Income Tax Paid:- Operating Activity

p) Income paid on gain(profit) on sale of assets:- Investing Activity

q) Cash received from debtors:- Operating Activity

r) Cash paid to creditors:- Operating Activity

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