Question

From the following information, calculate Cash Flow from Investing Activities

Particular	31st March, 2019 (₹)	31st March, 2018 (₹)
Plant and Machinery	10,00,000	8,50,000
Investment (Long-term)	1,00,000	40,000
Land (At Cost)	1,00,000	2,00,000

Additional Information:
1. Depreciation charged on Plant and Machinery ₹ 50,000.
2. Plant and Machinery with a Book Value of ₹ 60,000 was sold for ₹ 40,000.
3. Land was sold at a profit of ₹ 60,000.
4. No investment was sold during the year.

Answer 1

Cash Flow from Investing Activities
	Particulars	Amount (₹)	Amount (₹)
	Purchase of Plant and Machinery (WN1)	(2,60,000)
	Purchase of Investments	(60,000)
	Sale of Plant and Machinery (WN1)	40,000
	Sale of Land (WN2)	1,60,000
	Net Cash Used in Investing Activities		(1,20,000)

Working Notes:

WN1

Plant and Machinery Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	8,50,000	Depreciation A/c	50,000
Bank A/c (Purchases- Bal. Fig.)	2,60,000	Bank A/c (Sale)	40,000
		Profit and Loss A/c (Loss on Sale)	20,000
		Balance c/d	10,00,000
	11,10,000		11,10,000

WN2

Land Account
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	2,00,000	Bank A/c (Sale- Bal. Fig.)	1,60,000
Profit and Loss A/c (Profit on Sale)	60,000	Balance c/d	1,00,000
	2,60,000		2,60,000