W Ltd has given you the following information:
Machinery (Opening Balance) ₹50,000
Machinery (closing Balance) ₹60,000
Accumulated Depreciation (opening balance) ₹25,000
Accumulated Depreciation (closing balance) ₹15,000
During the year, a machine costing ₹25,000 with accumulated depreciation of ₹15,000 was sold for ₹13,000. Calculate Cash Flow from Investing Activity.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- (₹22,000).
Sale of Machinery 13,000
Less: Purchase of Machinery (35,000)
Net cash used in Investing Activities= 35,000 -13,000 = (22,000)
As figure is given in bracket shown negative or outflow in accounting so correct ans will be (22,000).
Machinery Account
|
Particulars |
J.F. |
Amount(₹) |
Particulars |
J.F. |
Amount(₹) |
|
Balance b/d |
|
50,000 |
Cash (proceeds from sale of machine) |
|
13,000 |
|
Statement of Profit and Loss |
3,000 |
Accumulated Depreciation |
15,000 |
||
|
Cash (balancing figure:new machinery purchased) |
35,000 |
Balance c/d |
60,000 |
||
|
|
88,000 |
|
88,000 |
Accumulated Depreciation Account
|
Particulars |
J.F. |
Amount (₹) |
Particulars |
J.F. |
Amount (₹) |
|
Machinery |
|
15,000 |
Balance b/d |
|
25,000 |
|
Balance c/d |
15,000 |
Statement of Profit and Loss |
5,000 |
||
|
|
30,000 |
|
30,000 |