A company acquired machinery for ₹2,50,000 paying a 20% down payment and executing a bond for the balance payable. How much cash is used in investing activity of the company?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹50,000.
Machinery = 2,50,000
Down payment = 20%.
It was in cash.
So, Cash used = 2,50,000 X 20/100
= ₹50,000
Remaining amount is paid later as bond is signed for that.