Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

W Ltd. has given you the following information:
Machinery as on April 1, 2020-50,000
Machinery as on March 31, 2021 - 60,000
Accumulated Depreciation on April 01, 2020 - ₹25,000
Accumulated Depreciation on March 31, 2021- 15,000
During the year, a machine, costing 25,000 with accumulated depreciation of 15,000 was sold for 13,000.
Cash flow from Investing Activities will be:

Options:

₹22000

(₹22000)

₹48000

(₹35000)

Correct Answer:

(₹22000)

Explanation:

Sale of Machinery 13,000
Less: Purchase of Machinery (35,000)
Net cash used in Investing Activities= 35000 -13000 = (22,000)
As figure is given in bracket shown negative or outflow in accounting so correct ans will be (22000).

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
(profit on sale of machinery)

 3,000

Accumulated Depreciation

15,000

Cash (balancing figure:new machinery purchased)

35000

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
(Depreciation  provided during the year)

5,000

 

30,000

 

30,000