For each of the following, transactions, calculate the resulting cash flow and state the nature of cash flow viz. operating, investing and financing.
(a) Acquired machinery for Rs. 2,50,000 paying $20 %$ by cheque and executing a bond for the balance payable.
(B) Paid Rs. 2,50,000 to acquire shares in Informa Tech and received a dividend of R.s 50,000 after acquisition.
(c) Sold machinery of original cost Rs. 2,00,000 with an accumulated depreciation of Rs. 1,60,000 for Rs. 60,000.

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Solution

(a) Related to investing activity Rs 50,000 as part payment.

Working Note:
Rs. $2, 50, 000 \times \frac{20}{100} = R s . 50, 000$ (outflow)

(b) Related to investing activity.
Acquiring shares in informa Tech is an investment and dividend received on it is also part of same.

Working Note:
Rs. 2,50,000 – Rs. 50,000 = Rs. 2,00,000 (outflow)

(c) Inflow of cash of ₹ 60,000 on sale of machinery is a part investing activities.

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Similar questions

For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow, viz., operating, investing and financing.

(a) Acquired machinery for Rs 2,50,000 paying 20% by cheque and executing a bond for the balance payable.

(b) Paid Rs 2,50,000 to acquire shares in Informa Tech. and received a dividend of Rs 50,000 after acquisition.

Q. For each of the following transactions, calculate the resulting Cash Flow and state the nature of Cash Flow, i.e., whether it is Operating, Investing or Financing:
(a) Acquired machinery for ₹2,50,000 paying 20% by cheque and executing a bond for the balance payable.
(b) Paid ₹2,50,000 to acquire shares in Informa Tech Ltd. and received a dividend of ₹50,000 after acquisition.
(c) Sold machinery of original cost of ₹2,00,000 with an accumulated depreciation of ₹1,60,000 for ₹60,000.

Calculate the result of Cash Flow and state the nature of activity involved in the following transaction :

Sold machinery of original Cost Rs 2,20,000 with an accumulated depreciation of Rs 90,000 fo Rs 70,000.

Calculate Cash Flow from Investing Activities from the following information:
$\begin{matrix} Particulars & 31st March, & 31st March, 2015 & 2014 Investment in shares of Miko. Ltd. & 18, 00, 000 & 8, 00, 000 12 % Long Term Investments & 1, 50, 000 & 5, 00, 000 Plant and Machinery & 6, 00, 000 & 4, 00, 000 Goodwill & 1, 20, 000 & 40, 000 \end{matrix}$
Additional Information:

(i) 9% dividend was received from Miko Ltd.
(ii) A machine costing Rs. 50,000 (depreciation provided thereon Rs. 15,000) was sold for Rs. 40,000. Depreciation charged during the year was Rs. 55,000.

Welprint Ltd. has given you the following information:

Machinery as on April 01, 2012 : Rs.50,000

Machinery as on March 31, 2013 : Rs.60,000

Accumulated Depreciation on April 01, 2012 : Rs.25,000

Accumulated Depreciation on March 31, 2013 : Rs.15,000

During the year, a Machine costing Rs 25,000 with Accumulated Depreciation of Rs. 15,000 was sold for Rs. 13,000.

Calculate cash flow from Investing Activities on the basis of the above information.

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