The following is an extract of a Balance Sheet : Particulars 31 March…

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

Goodwill at the start of the year = 4,00,000
Less: Amortised                        = 1,50,000
Remaining goodwill                   = 2,50,000
Goodwill at the end of year        = 6,00,000
Goodwill at the end of the year is more than remaining goodwill means goodwill is purchased.
Purchase of goodwill = 6,00,000 - 2,50,000
                                   = 3,50,000

Land and building at the start of year = 10,00,000
Land and building at the end of year   = 15,00,000
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 = 15,00,000 -10,00,000
                                                  = 5,00,000

Purchase is an outflow activity.

Outflow from investing activity = Purchase of land and building + Purchase of goodwill
                                             = 5,00,000 + 3,50,000
                                             = 8,50,000