If a machine whose original cost is Rs40,000 having accumulated depreciation Rs12,000, were sold for Rs34,000 then while preparing Cash Flow Statement its effect on cash flow will be :

Cash flow from investing activities Rs34,000

As per AS-3, investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Investing activities relate to purchase and sale of long-term assets or fixed assets such as machinery, furniture, land and building, etc. Transactions related to long-term investment are also investing activities.
Machine cost is Rs 40,000
Accumulated depreciation Rs12,000
Sold for Rs 34,000
Book value of machine = cost - depreciation
                                    = 40000 - 12000
                                    = 28000
Profit on sale = 34000 - 28000
                      = 6000
Sale value will be the inflow of cash to the company.