Question

From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also, show the workings clearly preparing the ledger accounts:

Balance Sheet of Bharat Gas Ltd. as on 31 Mar. 2016 and 31 Mar. 2017
Particulars	Note No.	Figures as the end of 2017 (Rs)	Figures as at the end of reporting 2016 (Rs)
II) Assets
1. Non-current Assets
a) Fixed assets
i) Tangible assets	1	12,40,000	10,20,000
ii) Intangible assets	2	4,60,000	3,80,000
b) Non-current investments	3	3,60,000	2,60,000

Notes	1	Tangible assets = Machinery
	2	Intangible assets = Patents

Notes

	Figures of current year	Figures of previous year
1. Tangible Assets
Machinery	12,40,000	10,20,000
2. Intangible Assets
Goodwill	3,00,000	1,00,000
Patents	1,60,000	2,80,000
	4,60,000	3,80,000
3. Non-current Investments
10% long term investments	1,60,000	60,000
Investment in land	1,00,000	1,00,000
Shares of Amartex Ltd.	1,00,000	1,00,000
	3,60,000	2,60,000

Additional Information:

(a) Patents were written-off to the extent of Rs. 40,000 and some Patents were sold at a profit of Rs. 20,000.

(b) A Machine costing Rs. 1,40,000 (Depreciation provided thereon Rs. 60,000) was sold for Rs. 50,000. Depreciation charged during the year was Rs. 1,40,000.

(c) On March 31, 2016, 10% Investments were purchased for Rs. 1,80,000 and some Investments were sold at a profit of Rs. 20,000. Interest on Investment was received on March 31, 2017.

(d) Amartax Ltd. paid Dividend @ 10% on its shares.

(e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs. 30,000.

Answer 1

Cash Flow from Investing Activities
Particulars			Amount Rs	Amount Rs
Cash Inflow
	Proceeds from Sale of Patents		1,00,000
	Proceeds from Sale of Machinery		50,000
	Proceeds from Sale of 10% Long-term Investment		1,00,000
	Interest received on 10% Long-term Investment		6,000
	Dividend Received from Amartax Ltd.		10,000
	Rent Received		30,000	2,96,000
Cash Outflow
	Purchase of Goodwill		(2,00,000)
	Purchase of Machinery		(4,40,000)
	Purchase of 10% Long-term Investment		(1,80,000)	(8,20,000)
Net Cash used in Investing Activities				(5,24,000)

Patents Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
	Balance b/d		2,80,000		Profit and Loss (written off)		40,000
	Profit and Loss (Profit on sale)		20,000		Bank (sale- Balancing figure)		1,00,000
					Balance c/d		1,60,000
			3,00,000				3,00,000

Machinery Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
	Balance b/d		10,20,000		Depreciation		1,40,000
	Bank (Purchases- Balancing figure)		4,40,000		Bank		50,000
					Profit and Loss		30,000
					Balance c/d		12,40,000
			14,60,000				14,60,000

10% Long-term Investment Account
Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
	Balance b/d		60,000		Bank (Balancing figure)		1,00,000
	Bank		1,80,000
	Profit and Loss (Profit on sale)		20,000		Balance c/d		1,60,000
			2,60,000				2,60,000