Doubts

SOLUTION It will be added to net profit in operating activities and will also be shown as outflow under financing activities.

SOLUTION Financing Activity.

SOLUTION (i) Payment of Interest and Dividend: Financing Activity(ii) Receipt of interest and Dividend: Investing Activity.

SOLUTION It will be shown as outflow under ‘Cash flows from investing activities’.

SOLUTION Bank Overdraft is short-term borrowing and will be treated as financing activity.

SOLUTION Operating Activity.

SOLUTION Operating Activity.

SOLUTION Payment of tax will be deducted under ‘Cash flows from operating activities' and payment of dividend will be shown as outflow under ‘Cash flows from financing activities’.

SOLUTION Increase in balance of securities premium represents the amount of premium received on issue of shares and debentures. It will be shown as ‘Cash from Financing Activities’.