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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)


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 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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