Calculate the net amount of "Source" or "Use" of cash when a fixed asset having book value of ₹15,000 is sold at a loss of ₹5,000.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Source ₹10,000.
Fixed asset (book value) = ₹15,000
Sold at loss of ₹5,000
Sale of fixed asset = 15,000 - 5,000
= ₹10,000 (Source)
It is a source of cash as sale makes an inflow of cash.