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Home Questions K4R6RZ3M4H
Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

A company redeemed ₹5,00,000, 9% debentures at 10% premium. What will be the amount of 'Cash flows and from which activity it is generated?

Options:

₹500000 and operating activity

₹550000 and financing activity

₹450000 and investing activity

₹545000 and operating activity

Correct Answer:

₹550000 and financing activity

Explanation:

Debenture redeemed = ₹500000
Premium on debentures = 500000 X 10/100 = ₹50000
Total amount of cash outlow from financing activity = 500000 + 50000 = ₹550000

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