Question : ABC Ltd. has Machinery WDV of which on 1st april 2021 was Rs.8,60,000 and on 3st march 2022 Rs.9,50,000. Depreciation for the year was Rs.40,000. In the beginning of the year, A part of the Machinery was sold for Rs.25,000, Which had a WDV of Rs.20,000. Calculate Cash low From Investing activity :
Option 1: Rs.1,25,000
Option 2: Rs.(1,25,000)
Option 3: Rs.2,50,000
Option 4: Rs.(2,50,000)
Answer (1)
25th Jan, 2024
Correct Answer: Rs.(1,25,000)
Solution : Machinary A/c
| To Balance b/d | 860000 | By Dep. account | 40000 |
| To P/L (Gain) | 5000 | By bank Account | 25000 |
| To Bank (Purchase) b/f | 150000 | By Balance c/d | 950000 |
| 1015000 | 1015000 |
Hence the cash flow from Investing Activity is Rs.(125000)
Proceeds from sale of machinary Rs.25000
Purchase of Machinary Rs (150000)
Hence the correct answer is option 2.
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