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.
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 |
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 |
5,000 |
||
|
|
30,000 |
|
30,000 |