Classify and give reasons for the cash flows falling under the operating activities.
Financial Accounting & Analysis
1. Ms. Sandipa is the accounts executive for a company called SS Enterprises. Her job description requires her to supervise the process of recording of the transactions of business and to ensure that all accounting assumptions are taken care of. However, her junior executive is confused about the concepts of the accounting period assumption and the Separate entity assumption.
Elaborate how Sandipa can explain the concepts to her junior with the help of suitable example.
2. Marry Kom is planning to invest in the share market. She has a profile of risk seeker investor but she believes that before investing it’s important to understand market ratios effectively. Discuss any five market ratios with their importance that Marry Kom should look into before undertaking any investment decision.
3. The following information is available in relation to Britannia Baby Company. The Company has profit before taxes of Rs 50 lacs.
a. Classify and give reasons for the cash flows falling under the operating activities.
b. Classify and give reasons for the cash flows falling under the investing activities.
| Particulars | Amount
Rs in (Lacs) |
| Tangible assets purchased during the year | 75 |
| Depreciation charged on these tangible assets for the year @ 10% | ? |
| Stock sold for the year | 95 |
| Loan given to Big Boy Company | 150 |
| Interest received from Big Boy company for the said loan @11.5% | ? |
| Shares purchased of a company called as Arvind Mills | 10 |
| Dividend Received from Arvind Mills | 1 |
| Taxes paid for the year @ 30% | ? |
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