ABC Ltd. has given you the following information:
|
PARTICULARS |
AMOUNT (₹) |
|
Machinery as on April 01, 2016 |
50,000 |
|
Machinery as on March 31, 2017 |
60,000 |
|
Accumulated Depreciation on April 01, 2016 |
25,000 |
|
Accumulated Depreciation on March 31, 2017 |
15,000 |
Additional information-
During the year, a Machine costing ₹25,000 with Accumulated Depreciation of ₹15,000 was sold for ₹13,000.
Cash flow from Investing Activities on the basis of the above information will be:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Net cash used ₹22,000
Investing activities here are the purchase and the sale of machinery. The purchase is not given, so it is found from the Machinery account at cost; accumulated depreciation does not affect cash.
Purchase of machinery:
= Closing balance + Cost of machine sold − Opening balance
= ₹60,000 + ₹25,000 − ₹50,000
= ₹35,000
Cash flow from investing activities:
Sale of machinery = ₹13,000 (inflow)
Purchase of machinery = (₹35,000) (outflow)
Net cash used = ₹22,000
The sale proceeds of ₹13,000 are the cash received; the profit or loss on the sale is not a separate cash flow.
NCERT (2026-27 edition):
|
