From the following information, calculate net cash inflow or net cash outflow from financing activities:Partic

Question

From the following information, calculate net cash inflow or net cash outflow from financing activities:ParticularsApril 1, 2016March 31, 2017Long-term LoansRs. 2,00,000Rs. 2,50,000During the year, the company repaid a loan of Rs. 1,00,000.

Accepted Answer

Let's create a ledger account or calculate via equation to find total new loans taken during the year:

Closing Balance of Loan = Opening Balance + New Loans Raised - Repayments

2, 50, 000 = 2, 00, 000 + New Loans Raised - 1, 00, 000

2, 50, 000 = 1, 00, 000 + New Loans Raised

New Loans Raised = 2, 50, 000 - 1, 00, 000 = Rs. 1, 50, 000 (Inflow)

Now, let's look at the net cash effect from financing activities:

Proceeds from fresh Long-term Loan = + Rs. 1, 50, 000

Repayment of Long-term Loan = - Rs. 1, 00, 000

Net Cash Inflow from Financing Activities = 1, 50, 000 - 1, 00, 000 = Rs. 50, 000 (Inflow)

From the following information, calculate net cash inflow or net cash outflow from financing activities:ParticularsApril 1, 2016March 31, 2017Long-term LoansRs. 2,00,000Rs. 2,50,000During the year, the company repaid a loan of Rs. 1,00,000.

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