Question : Sale of fixed assets (Book value Rs. 50,000 ) at a loss of Rs. 5,000, would result in inflow/outflow/no flow of Cash and Cash Equivalents:
Option 1: inflow - cash increased by Rs, 45,000
Option 2: outlow- cash decreased by Rs 45,000
Option 3: Inflow- cash increased by Rs 50,000
Option 4: Outflow - cash decreased by Rs 45,000
Answer (1)
23rd Jan, 2024
Correct Answer: inflow - cash increased by Rs, 45,000
Solution : Answer = inflow - cash increased by Rs 45,000
The sale of fixed assets at a loss of Rs. 5,000 would result in an inflow of cash, increasing cash by Rs. 45,000. Despite the loss, the cash received from the sale contributes to an overall increase in cash and cash equivalents.
Hence, the correct option is 1.
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