From the following information, determine amount of machinery purchased, to be shown as outflow in Investing Activities.
| 31 March 23 | 31 March 22 | |
| Machinery (Cost) | 12,50,000 | 10,00,000 |
| Accumulated Depreciation | 2,10,000 | 1,80,000 |
Additional Information:
During the year 2022-23, a part of Machinery Costing ₹2,00,000 (Book value 1,60,000) was sold at a loss of ₹25,000.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹4,50,000
Machinery is carried at cost, so the purchase is the balancing figure of the Machinery Account at cost:
Opening balance (cost) = ₹10,00,000
Less: cost of machinery sold = ₹2,00,000
Closing balance (cost) = ₹12,50,000
Machinery purchased = 12,50,000 − 10,00,000 + 2,00,000 = ₹4,50,000
Accumulated depreciation, book value and the loss on sale do not change the cost column; they matter only for the sale proceeds (₹1,60,000 − ₹25,000 = ₹1,35,000 inflow).
NCERT (2026-27 edition):
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