Read the following information and answer the question.
| PARTICULARS | AMOUNT AT THE BEGINNING OF THE YEAR (₹) |
AMOUNT AT THE END OF THE YEAR (₹) |
| Plant (cost) | 3,00,000 | 3,20,000 |
| Accumulated depreciation | 90,000 | 1,00,000 |
| Patents | 2,60,000 | 1,40,000 |
| Goodwill | 80,000 | 1,00,000 |
ADDITIONAL INFORMATION:
- The depreciation charged during the year on the plant was ₹36,000.
- A plant having a book value of ₹20,000 was sold for ₹16,000 during the year.
- Patents having a book value of ₹80,000 were sold for ₹1,10,000 during the year.
How much amount of the sales proceeds of the plant were added/subtracted?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹16,000 added.
A plant having a book value of ₹20,000 was sold for ₹16,000.
Cash inflow is added of ₹16,000 as it is sold for ₹16,000. ₹4000 is the loss which is non-cash expenditure.