Select the amount of net Cash Flow from Investing activities on the basis of following information, for the year ending on March 31st, 2023.
Machinery as on April 1st, 2022 ₹ 50,000
Machinery as on March 31st, 2023 ₹ 60,000
During the year, machine costing ₹25,000 with accumulated depreciation of ₹ 15,000 was sold for ₹10,000.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹ 25,000 outflow.
Sale of Machinery 10,000
Less: Purchase of Machinery (35,000)
Net cash used in Investing Activities= 35,000 -10,000 = (25,000)
As figure is given in bracket shown negative or outflow in accounting so correct ans will be (25,000).
Machinery Account
|
Particulars |
J.F. |
Amount(₹) |
Particulars |
J.F. |
Amount(₹) |
|
Balance b/d |
|
50,000 |
Cash (proceeds from sale of machine) |
|
10,000 |
|
Statement of Profit and Loss |
0 |
Accumulated Depreciation |
15,000 |
||
|
Cash (balancing figure:new machinery purchased) |
35,000 |
Balance c/d |
60,000 |
||
|
|
85,000 |
|
85,000 |
Machinery cost which is sold = 25,000
Accumulate depreciation on this = 15,000
Sale value = 10,000
This is Sold for 10,000 means there is no profit no loss.