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Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Cash Flow Statement

Question:

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:

Options:

Net cash flow ₹12,000

Net cash used ₹22,000

Net cash flow ₹13,000

Net cash used ₹35,000

Correct Answer:

Net cash used ₹22,000

Explanation:

The correct answer is Option (2) → Net cash used ₹22,000.

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

 

Machinery Account

Particulars

J.F.

Amount(₹)

Particulars

J.F.

Amount(₹)

To Balance b/d

 

50,000

By Cash (proceeds from sale of machine)

 

 13,000

To Statement of Profit and Loss
(profit on sale of machinery)

 3,000

By Accumulated Depreciation

15,000

To Cash (balancing figure:new machinery purchased)

35,000

By Balance c/d

 60,000

 

88,000

 

88,000

 

Accumulated Depreciation Account

Particulars

J.F.

Amount (₹)

Particulars

J.F.

Amount (₹)

To Machinery

 

15,000

By Balance b/d

 

25,000

To Balance c/d

15,000

By Statement of Profit and Loss
(Depreciation  provided during the year)

5,000

 

30,000

 

30,000

 

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