The following is an extract of a Balance Sheet :

Additional Information: Goodwill amortised during the year ₹1,50,000.

Determine the outflow of Cash from Investing Activities.

₹8,50,000

The correct answer is Option (3) → ₹8,50,000

Goodwill at the start of the year = 4,00,000
Less: Amortised                       = 150000
Remaining goodwill                  = 250000
Goodwill at the end of year       = 600000
Goodwill at the end of the year is more than remaining goodwill means goodwill is purchased.
Purchase of goodwill = 600000 - 250000
                              = 350000

Land and building at the start of year = 1000000
Land and building at the end of year = 1500000
Land and building at the end of year  is more than at the beginning of year means land and building is purchased.
Purchase of land and building = 1500000 -1000000
                                           = 500000

Outflow from investing activity = Purchase of land and building + Purchase of goodwill
                                             = 500000 + 350000
                                             = 850000