Hero Ltd, started a new venture of making casual shirts. The directors decided to issue 5,000,00 shares of Rs. 10 each at Rs. 12 each. The following assets were purchased by the company
A building of Rs. 10 lakhs
Furniture of Rs. 7 lakhs
Machinery of Rs. 2 lakhs
The company purchased cloth of Rs. 20 lakhs and paid wages Rs. 5,00,000 to the workers. The Directors also decided to buy 10,000 shares of TATA Ltd. of Rs. 10 each and at the end of the year Tata Ltd. Paid Rs. 10,000 as dividend
Dividend paid by TATA Ltd. is which activity for the company?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Investing activity
The dividend paid by TATA Ltd. is the dividend received by Hero Ltd. on its investment in TATA’s shares. For Hero Ltd., a non-financial company, dividend received is an inflow from investing activities.
NCERT (2026-27 edition): |