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    Question

    ABC Ltd., a non- financial enterprise presents the

    following information for the year ended 31st March 2025: • Proceeds from issue of equity shares: ₹1,200 lakh • Redemption of debentures: ₹500 lakh • Proceeds from long-term bank loan: ₹700 lakh • Conversion of ₹200 lakh of debentures into equity shares • Interest paid on long-term borrowings: ₹100 lakh • Dividend paid: ₹80 lakh • Amortization of debenture discount: ₹20 lakh  What is the net cash flow from financing activities for the year?
    A ₹1,140 lakh Correct Answer Incorrect Answer
    B ₹1,220 lakh Correct Answer Incorrect Answer
    C ₹1,240 lakh Correct Answer Incorrect Answer
    D ₹1,300 lakh Correct Answer Incorrect Answer

    Solution

    Cash Inflows: • Issue of equity shares = ₹1,200 lakh • Proceeds from long-term loan = ₹700 lakh Total Inflows = ₹1,900 lakh Cash Outflows: • Redemption of debentures = ₹500 lakh • Interest paid = ₹100 lakh • Dividend paid = ₹80 lakh Total Outflows = ₹680 lakh • Conversion of debentures into equity = ₹200 lakh → non-cash, excluded • Amortization of debenture discount = ₹20 lakh → non-cash, excluded Net Cash Flow from Financing Activities: =₹1,900lakh – ₹680lakh = ₹1,220 lakh

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