A part of fixed Assets costing ₹2,00,000 (Book value 1,50,000) was sold at a gain of ₹10,000.

How it will affect the cash flow statement?

Inflow ₹1,60,000 in Investing Activities and less ₹10,000 in Operating Activities

The correct answer is option 2- Inflow ₹1,60,000 in Investing Activities and less ₹10,000 in Operating Activities.

Book value = 1,50,000
Gain = 10,000
Total sale value = 1,50,000 + 10,000
                          = 1,60,000

Inflow ₹1,60,000 in Investing Activities as this is the sale value.

₹10,000 in Operating Activities is deducted as it is not operating activity. This is non recurring in nature so gain on sale is deducted.