Question

From the following Profit and Loss Account, calculate Funds From Operations:

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Salaries	50,000	By Gross Profit b/d	10,000
To Rent	20,000	By Discount	50,000
To Depreciation	10,000	By Interest on Investment	40,000
To Preliminary Expenses	20,000	By Net Loss	50,000
To Loss on Sale of Land	50,000
	1,50,000		1,50,000

Answer 1

Calculation of Funds From Operations

Particulars		Amount (Rs.)
Net Loss for the year (given)		(50,000)
Add: Non – fund items debited to P&L Account
Depreciation	10,000
Preliminary Expenses	20,000
Loss on Sale of Land	50,000
Less: Non – fund items credited to P&L Account
Interest on Investment	40,000	40,000
Loss from operations		(10,000)