From the following particulars, Determine Cash flows from Investing Activities.
|
|
Purchased (₹) |
Sold (₹) |
|
Machinery |
3,50,000 |
2,75,000 |
|
Land and Building |
4,50,000 |
3,00,000 |
Additional Information:
A plot of land had been purchased for investment purpose and was let out for commercial purpose and rent received ₹45,000.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹1,80,000 cash used
Purchase and sale of fixed assets are investing activities. The plot of land is held as an investment, so the rent received from it is an investing inflow.
Sale of machinery = ₹2,75,000 (inflow)
Sale of land and building = ₹3,00,000 (inflow)
Rent received = ₹45,000 (inflow)
Total inflows = ₹6,20,000
Purchase of machinery + land and building = ₹3,50,000 + ₹4,50,000 = ₹8,00,000 (outflow)
Net cash used in investing activities = ₹8,00,000 − ₹6,20,000 = ₹1,80,000
NCERT (2026-27 edition):
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