Question : AbC Ltd. purchased machinery of Rs. 20,00,000 issuing a cheque of Rs. 5,00,000 and 10% Debentures of Rs. 15,00,000. In the Cash Flow Statement, the transaction will be shown as
Option 1: Outflow under Investing Activity Rs. 20,00,000, inflow under Financing Activity as Receipt for Debentures Rs. 15,00,000
Option 2: Outflow under investing Activity Rs. 5,00,000
Option 3: Inflow of Rs. 15,00,000 as Financing Activity.
Option 4: None of the above
Correct Answer: Outflow under investing Activity Rs. 5,00,000
Solution : Answer = Outflow under-investing Activity Rs. 5,00,000
Outflow of Investing activities Rs 5,00,000 when we purchased machinery worth Rs 20,00,000 but paid by cheque Rs 5,00,000 only cash outflow Rs 5,00,000 only.
Hence, the correct option is 2.
