# Cash Flow Statement: Practical Problems and Solutions

### Reviewed by Subject Matter Experts

Updated on April 22, 2023

These problems will help students clarify key concepts about cash flow statements and to ready themselves for their exams and interviews.

## Problem 1

From the summarized cash book of Zenith Ltd. shown below, calculate net cash flow from operating activities.

## Problem 2

From the following profit and loss account of Samarth Ltd., calculate net cash flows from operating activities.

## Problem 3

From the following information extracted from the book of Max Ltd. for the year 2019-20, calculate net cash flow from investing activities.

Additional information is given as follows:

• Depreciation charged on furniture during the year was \$10,000
• Depreciation on machinery charged during the year was \$25,000
• Machinery, the book value of which was \$80,000, sold for \$75,000
• Land was sold at a profit of \$90,000

## Solution

Note: \$190,000 indicates cash outflows are more than inflows.

## Problem 4

You received the following information from Hema Enterprises Pvt. Ltd. Calculate the net cash flow from investing activities.

Information relating to assets sold during the year 2020 is given as follows:

• Furniture costing \$100,000 (accumulated depreciation \$20,000) was sold for \$70,000
• Machinery costing \$100,000 (accumulated depreciation \$30,000) was sold for \$80,000

## Solution

Note: Cash outflows are more than cash inflows (\$410,000).

## Problem 5

From the following information acquired from Tarapoore Ltd., calculate net cash flows from financing activities for the year 2019-20.

Note: Interest on debentures paid during the year was \$30,000 and on bank loan \$40,000.

## Problem 6

Base Ltd. provides the following information to you. Calculate net cash flows from financing activities for the year 2019-20.

Further information is given as follows:

• Interest on debentures paid, in total, during the year was \$60,000
• Interest on bank loan paid during the year was \$25,000
• Dividends paid during the year amounted to \$120,000

## Solution

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