From the following Particulars, calculate cash flow from investing activities:-
A plot of land been purchased for investment purpose and was let out for commercial use and rent received ₹30,000.
Interest paid on debentures ₹60,000
Purchase of Plant ₹4,40,000
Goodwill written off ₹20,000
Sale of Land ₹5,00,000
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹90,000.
Rent received ₹30,000- Cash inflow from investing activity
Interest paid on debentures ₹60,000- Cash outflow from financing activity
Purchase of Plant ₹4,40,000- Cash outflow from investing activity
Goodwill written off ₹20,000- Added to net profit while calculating cash flow from operating activity
Sale of Land ₹5,00,000- Cash inflow from investing activity
Cash flow from investing activities = 30,000 - 4,40,000 + 5,00,000
= 5,30,000 - 4,40,000
= 90,000