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Question

From the following particulars, calculate Cash Flow from Investing Activities

Particulars

Purchased (₹) Sold (₹)
Machinery 6,20,000 2,00,000
Investments 2,40,000 80,000
Goodwill 1,00,000 ...
Patents ... 1,50,000

Additional Information:
1. Interest received on debentures held as investment ₹ 8,000.
2. Interest paid on debentures issued ₹ 20,000.
3. Dividend received on shares held as investment ₹ 20,000.
4. Dividend paid on Equity Share Capital ₹ 30,000.
5. A plot of land was purchased out of the surplus funds for investment purposes and was let out for commercial use. Rent received ₹ 50,000 during the year.

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Solution

Cash Flow from Investing Activities

Particulars

Amount

(Rs)

Amount

(Rs)

Purchase of Machinery

(6,20,000)

Purchase of Investments

(2,40,000)

Purchase of Goodwill

(1,00,000)

Sale of Machinery

2,00,000

Rent Received

50,000

Dividend Received

20,000

Sale of Investments

80,000

Interest on Debentures

8,000

Sale of Patents

1,50,000

Net Cash Used in Investing Activities

(4,52,000)

Note: Dividend paid and interest paid is a part of Financing Activities.


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