Question

Calculate Cash Flow from Investing Activities from the following particulars:
$$\begin{array}{ccc}& \text{1st April, 2014}& \text{31st March, 2015}\\ & \text{Rs.}& \text{Rs.}\\ \text{Plant and Machinery}& 7,20,000& 8,60,000\end{array}$$

Additional Information:
(i) Depreciation charged during the year Rs. 85,000.
(ii) Plant and machinery having a written down value of Rs. 1,10,000 was sold for Rs. 1,25,000

Answer 1

Dr. Plant and Machinery Account Cr.
$$\begin{array}{cccc}\text{Particulars}& \text{Amount (Rs.)}& \text{Particulars}& \text{Amount (Rs.)}\\ \text{Balance b/d}& 7,20,000& \text{Bank A/c (Sale proceeds)}& 1,25,000\\ \text{Profit on Sale}& 15,000& \text{Depreciation A/c}& 85,000\\ \text{Bank A/c (Purchase)}& \underset{–}{3,35,000}& \text{Balance c/d}& \underset{–}{8,60,000}\\ & \underset{–}{10,70,000}& & \underset{–}{10,70,000}\end{array}$$
Cash Flow From Investing Activities
$$\begin{array}{cc}\text{Particulars}& \text{Amount (Rs.)}\\ \text{Proceeds from Sale fo Plant and Machinery}& 1,25,000\\ \text{Payment for Purchase of Plant and Machinery}& \underset{–}{(3,35,000)}\\ \text{Net Cash Used in Investing Activities}& \underset{–}{(2,10,000)}\end{array}$$