Class 12 Accountancy Part 2 Chapter 6 NCERT Solutions: Cash Flow Statement
Avisha Das21 Sept, 2026
The Cash Flow Statement Class 12 NCERT Solutions can be useful when the chapter feels difficult because several adjustments have to be considered before arriving at the final cash flow. Depreciation, working capital changes, tax, dividends, fixed assets and borrowings can affect the calculation, making it easy to miss a step or classify a transaction incorrectly.
The Class 12 Accountancy Chapter 6 solutions provide a way to practise these numerical questions and understand how each adjustment is used while preparing a Cash Flow Statement. Working through operating, investing and financing activities can help you become more familiar with the calculations and check where your approach differs from the NCERT method.
Important Numericals: Cash Flow Statement Class 12 NCERT Solutions
Question 1
Anand Ltd. earned a net income of Rs. 5,00,000 for the year ended March 31, 2017. Depreciation for the year was Rs. 2,00,000. The company earned a profit of Rs. 50,000 on the sale of assets, which was transferred to the Statement of Profit and Loss. Trade Receivables increased by Rs. 40,000 and Trade Payables increased by Rs. 60,000 during the year. Calculate Cash Flow from Operating Activities using the indirect method.
Solution:
Cash Flow from Operating Activities
|
Particulars |
Amount (Rs. ) |
Amount (Rs. ) |
|
Net Profit during the year |
5,00,000 |
|
|
Items to be adjusted: |
||
|
Add: Depreciation |
2,00,000 |
|
|
Less: Profit on sale of assets |
(50,000) |
1,50,000 |
|
Operating Profit before Working Capital Changes |
6,50,000 |
|
|
Add: Increase in Trade Payables |
60,000 |
|
|
Less: Increase in Trade Receivables |
(40,000) |
20,000 |
|
Net Cash from Operating Activities |
6,70,000 |
Answer: Cash Flow from Operating Activities = Rs. 6,70,000.
Question 2
From the following information, calculate the cash paid for inventory:
|
Particulars |
Amount (Rs. ) |
|
Inventory at the beginning |
40,000 |
|
Credit Purchases |
1,60,000 |
|
Inventory at the end |
38,000 |
|
Trade Payables at the beginning |
14,000 |
|
Trade Payables at the end |
14,500 |
Solution:
To calculate the cash paid for inventory, prepare the Trade Payables Account.
Trade Payables Account
|
Dr. Particulars |
Amount (Rs. ) |
Cr. Particulars |
Amount (Rs. ) |
|
Cash |
1,59,500 |
Balance b/d |
14,000 |
|
Balance c/d |
14,500 |
Purchases |
1,60,000 |
|
Total |
1,74,000 |
Total |
1,74,000 |
Cash paid is the balancing figure.
Answer: Cash paid for inventory = Rs. 1,59,500.
Question 3
For each of the following transactions, calculate the resulting cash flow and state whether it is an operating, investing or financing activity:
(a) Machinery costing Rs. 2,50,000 is acquired. Twenty per cent is paid by cheque and the balance is settled by executing a bond.
(b) Shares in Informa Tech are acquired for Rs. 2,50,000 and a dividend of Rs. 50,000 is received after the acquisition.
(c) Machinery with an original cost of Rs. 2,00,000 and accumulated depreciation of Rs. 1,60,000 is sold for Rs. 60,000.
Solution:
(a) Purchase of Machinery
Cash paid by cheque:
= Rs. 2,50,000 × 20%
= Rs. 50,000
The remaining Rs. 2,00,000 is settled through a bond and therefore does not involve a cash flow at the time of the transaction.
Answer: Rs. 50,000 cash outflow from Investing Activities.
(b) Purchase of Shares and Dividend Received
|
Particulars |
Amount (Rs. ) |
|
Amount paid for acquiring shares |
(2,50,000) |
|
Dividend received |
50,000 |
|
Net Cash Used in Investing Activities |
(2,00,000) |
Answer: Net cash outflow of Rs. 2,00,000 from Investing Activities.
(c) Sale of Machinery
Cash received from sale of machinery = Rs. 60,000
The cash received from the sale of machinery is classified as an investing cash flow.
Answer: Rs. 60,000 cash inflow from Investing Activities.
Question 4
The Statement of Profit and Loss of Yamuna Ltd. for the year ended March 31, 2017 shows Revenue from Operations of Rs. 10,00,000 and total expenses of Rs. 8,50,000, resulting in profit before tax of Rs. 1,50,000.
Additional information:
-
Trade Receivables decreased by Rs. 30,000.
-
Prepaid Expenses increased by Rs. 5,000.
-
Trade Payables increased by Rs. 15,000.
-
Outstanding Expenses increased by Rs. 3,000.
-
Other Expenses include depreciation of Rs. 25,000.
The following changes in current assets and liabilities are also given:
|
Particulars |
March 31, 2016 (Rs. ) |
March 31, 2017 (Rs. ) |
|
Trade Receivables |
14,000 |
15,000 |
|
Provision for Doubtful Debts |
1,000 |
1,200 |
|
Trade Payables |
13,000 |
15,000 |
|
Inventories |
5,000 |
8,000 |
|
Other Current Assets |
10,000 |
12,000 |
|
Expenses Payable |
1,000 |
1,500 |
|
Prepaid Expenses |
2,000 |
1,000 |
|
Accrued Income |
3,000 |
4,000 |
|
Income Received in Advance |
2,000 |
1,000 |
Compute Cash from Operations using the indirect method.
Solution:
Cash Flow from Operating Activities
|
Particulars |
Details (Rs.) |
Amount (Rs. ) |
|
Net Profit |
10,000 |
|
|
Add: Depreciation |
2,000 |
2,000 |
|
Operating Profit before Working Capital Adjustments |
12,000 |
|
|
Less: Increase in Current Assets |
||
|
Trade Receivables |
(1,000) |
|
|
Accrued Income |
(1,000) |
|
|
Other Current Assets |
(2,000) |
|
|
Inventories |
(3,000) |
|
|
Add: Increase in Current Liabilities |
||
|
Provision for Doubtful Debts |
200 |
|
|
Trade Payables |
2,000 |
|
|
Expenses Payable |
500 |
|
|
Add: Decrease in Current Assets |
||
|
Prepaid Expenses |
1,000 |
|
|
Less: Decrease in Current Liabilities |
||
|
Income Received in Advance |
(1,000) |
|
|
Net Cash from Operating Activities |
7,700 |
Answer: Net Cash from Operating Activities = Rs. 7,700.
Question 5
Calculate Cash from Operations from the following information:
-
Net Profit after depreciation = Rs. 10,000
-
Depreciation = Rs. 2,000
-
Trade Receivables increased by Rs. 1,000
-
Provision for Doubtful Debts increased by Rs. 200
-
Trade Payables increased by Rs. 2,000
-
Inventories increased by Rs. 3,000
-
Other Current Assets increased by Rs. 2,000
-
Expenses Payable increased by Rs. 500
-
Prepaid Expenses decreased by Rs. 1,000
-
Accrued Income increased by Rs. 1,000
-
Income Received in Advance decreased by Rs. 1,000
Solution:
Cash from Operating Activities
|
Particulars |
Amount (Rs. ) |
|
Net Profit |
10,000 |
|
Add: Depreciation |
2,000 |
|
Operating Profit before Working Capital Adjustments |
12,000 |
|
Less: Increase in Trade Receivables |
(1,000) |
|
Add: Increase in Provision for Doubtful Debts |
200 |
|
Add: Increase in Trade Payables |
2,000 |
|
Less: Increase in Inventories |
(3,000) |
|
Less: Increase in Other Current Assets |
(2,000) |
|
Add: Increase in Expenses Payable |
500 |
|
Add: Decrease in Prepaid Expenses |
1,000 |
|
Less: Increase in Accrued Income |
(1,000) |
|
Less: Decrease in Income Received in Advance |
(1,000) |
|
Net Cash from Operating Activities |
7,700 |
Answer: Net Cash from Operating Activities = Rs. 7,700.
Question 6
From the particulars of Bharat Gas Ltd., calculate Cash Flows from Investing Activities and show the workings clearly by preparing the required ledger accounts.
The question provides comparative balance-sheet figures for tangible assets, intangible assets and non-current investments, along with information relating to the purchase and sale of machinery, patents and investments and income received from investments and property.
Solution:
The investing cash flows are determined by preparing the relevant asset accounts and identifying the actual cash received or paid.
Cash Inflows from Investing Activities
|
Particulars |
Amount (Rs) |
|
Sale of Patents |
1,00,000 |
|
Sale of Machinery |
50,000 |
|
Sale of Long-term Investments |
1,00,000 |
|
Interest Received |
6,000 |
|
Dividend Received |
10,000 |
|
Rent Received |
30,000 |
|
Total Cash Inflows |
2,96,000 |
Cash Outflows from Investing Activities
|
Particulars |
Amount (Rs. ) |
|
Purchase of Goodwill |
(2,00,000) |
|
Purchase of Machinery |
(4,40,000) |
|
Purchase of Long-term Investments |
(1,80,000) |
|
Total Cash Outflows |
(8,20,000) |
Therefore:
Net Cash Used in Investing Activities
= Rs. 2,96,000 − Rs. 8,20,000
= Rs. 5,24,000
Answer: Net Cash Used in Investing Activities = Rs. 5,24,000.
Question 7
From the Balance Sheet of Mohan Ltd. as at March 31, 2016 and March 31, 2017, prepare the Cash Flow Statement.
Additional information:
-
A machine costing Rs. 80,000 with accumulated depreciation of Rs. 50,000 was sold for Rs. 20,000.
-
A 9% bank loan of Rs. 20,000 was repaid on March 31, 2017.
-
Proposed dividend for 2015–16 was Rs. 60,000.
Solution:
Working Notes
1. Profit as per Balance Sheet
Profit transferred to the Statement of Profit and Loss:
= Rs. 2,00,000 − Rs. 1,60,000
= Rs. 40,000
Add: Proposed Dividend = Rs. 70,000
Therefore:
Net Profit before Taxation and Extraordinary Items = Rs. 1,10,000
2. Depreciation
Depreciation for the year = Rs. 70,000
3. Loss on Sale of Machine
Book value of machine:
= Rs. 80,000 − Rs. 50,000
= Rs. 30,000
Sale proceeds = Rs. 20,000
Loss on sale:
= Rs. 30,000 − Rs. 20,000
= Rs. 10,000
Cash Flow from Operating Activities
|
Particulars |
Amount (Rs. ) |
Amount (Rs. ) |
|
Profit before Taxation and Extraordinary Items |
1,10,000 |
|
|
Add: Depreciation |
70,000 |
|
|
Add: Loss on Sale of Machine |
10,000 |
80,000 |
|
Operating Profit before Working Capital Changes |
1,90,000 |
|
|
Add/Less: Working Capital Adjustments |
||
|
Relevant current asset and liability adjustments |
||
|
Cash Flow from Operating Activities |
1,89,000 |
Cash Flow from Investing Activities
Sale of Machinery = Rs. 20,000
Purchase of Fixed Assets = Rs. 2,80,000
Net cash used in investing activities:
= Rs. 2,80,000 − Rs. 20,000
= Rs. 2,60,000
Cash Flow from Financing Activities
The financing activities include the issue/repayment of funds, interest and dividend-related cash flows.
Cash Flow from Financing Activities = Rs. 11,000
Answer:
-
Cash Flow from Operating Activities = Rs. 1,89,000
-
Cash Flow from Investing Activities = Rs. 2,60,000 outflow
-
Cash Flow from Financing Activities = Rs. 11,000
Question 8
From the Balance Sheets of Tiger Super Steel Ltd., prepare the Cash Flow Statement.
The comparative figures include share capital, reserves and surplus, trade payables, other current liabilities, short-term provisions, fixed assets, intangible assets, non-current investments, inventories, Trade Receivables and cash and cash equivalents.
Additional information:
-
Proposed dividend for 2016–17 is Rs. 15,600 and for 2015–16 is Rs. 11,200.
-
Depreciation on Land and Building during the year is Rs. 20,000.
-
Depreciation on Plant during the year is Rs. 10,000.
Solution:
Working Notes
1. Plant Account
|
Dr. Particulars |
Amount (Rs. ) |
Cr. Particulars |
Amount (Rs. ) |
|
To Balance b/d |
36,000 |
By Depreciation |
10,000 |
|
To Bank A/c (Purchase) |
50,400 |
By Balance c/d |
76,400 |
|
Total |
86,400 |
Total |
86,400 |
2. Profit before Tax
Profit as per Balance Sheet = Rs. 3,600
Add: General Reserve = Rs. 4,000
Add: Proposed Dividend = Rs. 11,200
Add: Provision for Taxation = Rs. 12,800
Net Profit before Taxation and Extraordinary Items = Rs. 36,000
Cash Flow from Operating Activities
|
Particulars |
Amount (Rs. ) |
Amount (Rs. ) |
|
Profit before Taxation and Extraordinary Items |
36,000 |
|
|
Add: Depreciation on Land and Building |
20,000 |
|
|
Add: Depreciation on Plant |
10,000 |
|
|
Add: Goodwill Written Off |
5,200 |
35,200 |
|
Operating Profit before Working Capital Changes |
71,200 |
|
|
Add: Increase in Trade Payables |
7,200 |
|
|
Add: Decrease in Inventories |
2,800 |
10,000 |
|
Less: Increase in Trade Receivables |
(13,200) |
|
|
Less: Decrease in Outstanding Expenses |
(800) |
(14,000) |
|
Cash Generated from Operating Activities |
67,200 |
|
|
Less: Income Tax Paid |
(11,200) |
|
|
Net Cash from Operating Activities |
56,000 |
Cash Flow from Investing Activities
The purchase of Plant and other fixed assets and investments is calculated from the relevant asset accounts.
Net Cash Used in Investing Activities = Rs. 60,400
Cash Flow from Financing Activities
Financing cash flows include changes in share capital, redemption of preference shares and dividend paid.
Net Cash from Financing Activities = Rs. 8,800
Answer:
-
Net Cash from Operating Activities = Rs. 56,000
-
Net Cash Used in Investing Activities = Rs. 60,400
-
Net Cash from Financing Activities = Rs. 8,800
Question 9
From the given comparative financial information, prepare a Cash Flow Statement.
The balance-sheet information includes share capital, reserves and surplus, 8% debentures, Trade Payables, fixed assets, inventories, Trade Receivables and cash and cash equivalents.
Additional information states that depreciation charged on Plant during the year is Rs. 80,000.
Solution:
Cash Flow from Operating Activities
The operating cash flow is calculated by starting with the profit figure and adjusting it for depreciation and changes in current assets and liabilities.
Cash Flow from Operating Activities = Rs. 4,28,000
Cash Flow from Investing Activities
The Fixed Assets Account is prepared to determine the amount spent on acquiring fixed assets.
Purchase of Fixed Assets = Rs. 2,80,000
Therefore:
Net Cash Used in Investing Activities = Rs. 2,80,000
Cash Flow from Financing Activities
The financing section considers the issue of share capital, redemption of debentures and interest paid.
Net Cash Used in Financing Activities = Rs. 48,000
Answer:
-
Cash Flow from Operating Activities = Rs. 4,28,000
-
Cash Used in Investing Activities = Rs. 2,80,000
-
Cash Used in Financing Activities = Rs. 48,000
Question 10
From the Balance Sheet of Yogeta Ltd., prepare the Cash Flow Statement.
Additional information:
-
Net Profit for the year after charging depreciation of Rs. 50,000 is Rs. 1,50,000.
-
Dividend paid on shares is Rs. 50,000.
-
Tax provision created during the year is Rs. 60,000.
The balance sheet provides details of equity share capital, preference share capital, long-term borrowings, reserves and surplus, fixed assets, current assets and other relevant items.
Solution:
Cash Flow from Operating Activities
|
Particulars |
Amount (Rs. ) |
|
Net Profit |
1,50,000 |
|
Add: Depreciation |
50,000 |
|
Add: Provision for Taxation |
60,000 |
|
Adjustments for Working Capital Changes |
As per Balance Sheet |
|
Less: Income Tax Paid |
As per information |
|
Net Cash from Operating Activities |
Rs. 1,20,000 |
Cash Flow from Investing Activities
Purchase of Fixed Assets:
Rs. 3,50,000
Therefore:
Net Cash Used in Investing Activities = Rs. 3,50,000
Cash Flow from Financing Activities
Financing activities include:
-
Issue of Equity Shares = Rs. 1,00,000
-
Issue of Preference Shares = Rs. 1,00,000
-
Additional Loan from Rahul = Rs. 1,30,000
-
Repayment of earlier loan = Rs. 2,00,000
-
Dividend Paid = Rs. 50,000
After considering these financing transactions:
Net Cash from Financing Activities = Rs. 80,000
Answer: Prepare the final Cash Flow Statement by combining the operating, investing and financing cash flows with the opening cash balance.
Question 11
The Balance Sheet of Garima Ltd. is given. Prepare the Cash Flow Statement using the information provided.
The question includes changes in Profit, Interim Dividend, Depreciation, Trade Payables, Inventories, Trade Receivables, Prepaid Expenses and Fixed Assets.
Additional information includes:
-
Profit for the year = Rs. 16,000
-
Interim Dividend = Rs. 4,000
-
Depreciation = Rs. 32,000
-
Increase in Trade Payables = Rs. 1,00,000
-
Increase in Inventories = Rs. 1,00,000
-
Increase in Trade Receivables = Rs. 60,000
-
Increase in Prepaid Expenses = Rs. 8,000
-
Fixed Assets increased from Rs. 2,00,000 to Rs. 3,64,000.
Solution:
Working Note: Fixed Assets
Closing Fixed Assets = Rs. 3,64,000
Opening Fixed Assets = Rs. 2,00,000
Add: Depreciation = Rs. 32,000
Therefore:
Purchase of Fixed Assets:
= Rs. 3,64,000 − Rs. 2,00,000 + Rs. 32,000
= Rs. 1,96,000
Cash Flow from Operating Activities
The operating section is prepared after adjusting profit for depreciation and the changes in current assets and liabilities.
Cash Flow from Operating Activities = Rs. 12,000
Cash Flow from Investing Activities
Purchase of Fixed Assets = Rs. 1,96,000
Therefore:
Cash Used in Investing Activities = Rs. 1,96,000
Cash Flow from Financing Activities
The financing section is prepared after considering the changes in share capital, dividend and other financing items given in the question.
Cash Flow from Financing Activities = Rs. 1,56,400
Answer:
-
Cash Flow from Operating Activities = Rs. 12,000
-
Cash Used in Investing Activities = Rs. 1,96,000
-
Cash Flow from Financing Activities = Rs. 1,56,400
Question 12
From the Balance Sheet of Computer India Ltd., prepare the Cash Flow Statement.
The Balance Sheet includes Reserve and Surplus, Bank Overdraft, Provision for Taxation, Proposed Dividend and Fixed Assets with accumulated depreciation.
The additional information states that interest paid on debentures is Rs. 600.
Solution:
Working Notes
Profit as per Balance Sheet:
= Rs. 1,200 − Rs. 1,000
= Rs. 200
Add:
-
Proposed Dividend = Rs. 5,800
-
General Reserve = Rs. 500
-
Provision for Taxation = Rs. 4,200
-
Interest on Debentures = Rs. 600
-
Depreciation = Rs. 4,000
The required working capital adjustments are then made for Trade Receivables, Inventories, Prepaid Expenses and Trade Payables.
Cash Flow from Operating Activities
After the required adjustments:
Cash Flow from Operating Activities = Rs. 2,100 thousand
Cash Flow from Investing Activities
Cash received from sale of fixed assets:
Rs. 1,000 thousand
Therefore:
Cash Flow from Investing Activities = Rs. 1,000 thousand
Cash Flow from Financing Activities
The financing section includes the issue of equity shares, issue of debentures, dividend paid and interest paid.
|
Particulars |
Amount |
|
Issue of Equity Shares |
Rs. 10,000 thousand |
|
Issue of 10% Debentures |
Rs. 500 thousand |
|
Dividend Paid |
(Rs. 5,000 thousand) |
|
Interest Paid |
(Rs. 600 thousand) |
|
Net Cash from Financing Activities |
Rs. 4,900 thousand |
Answer:
-
Cash Flow from Operating Activities = Rs. 2,100 thousand
-
Cash Flow from Investing Activities = Rs. 1,000 thousand
-
Cash Flow from Financing Activities = Rs. 4,900 thousand
Cash Flow Statement Class 12 NCERT Solutions PDF
The official NCERT Accountancy Part 2 Chapter 6 PDF contains the Cash Flow Statement chapter, examples, explanations and numerical questions. You can use the NCERT PDF along with the solutions above while revising the chapter.
Cash Flow Statement Class 12 NCERT Solutions PDF
How to Use Class 12 Accountancy Chapter 6 NCERT Solutions?
Use the solutions after attempting each numerical yourself. This makes it easier to identify whether your mistake was in classification, adjustment, calculation or the final Cash Flow Statement.
-
Attempt the question first: Read the complete question and prepare your own working before checking the answer.
-
Follow the NCERT method: Pay attention to the order in which profit, non-cash items and working capital changes are adjusted.
-
Prepare working notes: Use asset accounts, accumulated depreciation accounts and other ledger accounts whenever required.
-
Check working capital adjustments: Review the effect of increases and decreases in current assets and current liabilities carefully.
-
Separate the three activities: Keep operating, investing and financing cash flows separate while preparing the statement.
-
Check the final cash balance: Reconcile the opening cash and cash equivalents with the net increase or decrease in cash.
-
Practise the difficult numericals again: Questions involving fixed assets, depreciation, investments, loans and dividends should be attempted again after checking the solution.
Practising the Cash Flow Statement Class 12 NCERT Solutions can help you understand the working behind operating, investing and financing activities. Attempt the NCERT numericals yourself first, follow the working notes carefully, and use the solutions to check your calculations before moving to additional practice questions.
FAQs
1. What is covered in Cash Flow Statement Class 12 NCERT Solutions?
2. How many numerical questions are included in Chapter 6?
3. Which method is used for calculating Cash Flow from Operating Activities?
4. What are the three activities in a Cash Flow Statement?
Get Free Counselling Today
and Clear up all your Doubts
Live & recorded classes available at easeDashboard for progress trackingLakhs of practice questions
