Page No 5.100:
Question 25:
From the following details. Calculate Cash Flow from Investing Activities
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|
|
|
|
Particulars |
Closing Balance ( `) |
Opening Balance ( `) |
|
Machinery
(At Cost) |
10,00,000 |
9,50,000 |
|
Accumulated
Depreciation |
1,50,000 |
1,10,000 |
|
Patents |
2,00,000 |
3,00,000 |
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|
|
|
|
|
|
|
Additional Information:
- During
the year, machine costing ` 90,000
with accumulated depreciation of ` 60,000
was sold for `
50,000.
- Patents
written off were ` 50,000
while a part of patents were sold at a profit of `
40,000.
Answer:
|
Cash Flow from Investing
Activities |
||||
|
|
Particulars |
Amount (
`) |
Amount (
`) |
|
|
|
|
Purchase of Machinery (WN1) |
(1,40,000) |
|
|
|
|
Sale of Machinery |
50,000 |
|
|
|
|
Sale of Patents (WN3) |
90,000 |
Nil |
|
|
Net Cash Used in Investing Activities |
|
Nil |
|
Working
Notes:
WN1:
|
Machinery Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Particulars |
Amount (
`) |
Particulars |
Amount (
`) |
||
|
Balance b/d |
9,50,000 |
Provision for
Depreciation A/c |
60,000 |
||
|
Profit and Loss A/c (Profit on Sale) |
20,000 |
Bank A/c (Sale) |
50,000 |
||
|
Bank A/c
(Purchase) |
1,40,000 |
Balance c/d |
10,00,000 |
||
|
|
11,10,000 |
|
11,10,000 |
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WN2:
|
Provision for Depreciation Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Particulars |
Amount (
`) |
Particulars |
Amount (
`) |
||
|
Asset A/c |
60,000 |
Balance b/d |
1,10,000 |
||
|
Balance c/d |
1,50,000 |
Profit and Loss A/c (Depreciation
charged during the year) |
1,00,000 |
||
|
|
2,10,000 |
|
2,10,000 |
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|
|
|
|
||
WN3:
|
Patents Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Particulars |
Amount (
`) |
Particulars |
Amount (
`) |
||
|
Balance b/d |
3,00,000 |
Patents Written off |
50,000 |
||
|
Profit and Loss A/c (Profit on
Sale) |
40,000 |
Bank A/c (Sale)
(Balancing Figure) |
90,000 |
||
|
|
|
Balance c/d |
2,00,000 |
||
|
|
3,40,000 |
|
3,40,000 |
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Page No 5.101:
Question 26:
|
Welprint
Ltd. has given the following information: |
` |
|
Machinery
as on 1st April, 2020 |
50,000 |
|
Machinery
as on 31st March, 2021 |
60,000 |
|
Accumulated
Depreciation on 1st April, 2020 |
25,000 |
|
Accumulated
Depreciation on 31st march, 2021 |
15,000 |
During the year, a machine costing ` 25,000 (accumulated depreciation thereon ` 15,000) was sold for ` 13,000.
Calculate Cash Flow from Investing Activities on the basis of the above information.
Answer:
|
Cash Flow Statement |
|||
|
|
Particulars |
Amount ( `) |
Amount ( `) |
|
|
Cash
Flow from Investing Activities |
|
|
|
|
Purchase
of Machinery |
(35,000) |
|
|
|
Sale of
Machinery |
13,000 |
(22,000) |
|
|
Cash Used in Investing Activity |
|
(22,000) |
Working Notes:
|
Machinery Account |
|||||
|
Dr. |
|
Cr. |
|||
|
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
||
|
Balance
b/d |
50,000 |
Bank
A/c |
13,000 |
||
|
Profit
and Loss A/c |
3,000 |
Accumulated
Depreciation A/c |
15,000 |
||
|
Bank
A/c (Bal. Fig.) |
35,000 |
Balance
c/d |
60,000 |
||
|
|
88,000 |
|
88,000 |
||
|
|
|
|
|
||
|
Accumulated Depreciation Account |
|||
|
Dr. |
Cr. |
||
|
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
|
Machinery
A/c |
15,000 |
Balance
b/d |
25,000 |
|
Balance
c/d |
15,000 |
Profit
and Loss A/c |
5,000 |
|
|
30,000 |
|
30,000 |
|
|
|
|
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Page No 5.101:
Question 27:
From the following information, calculate Cash Flow from Investing Activities
|
Particular |
31st March, ( `) |
31st March, ( `) |
|
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:
|
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 |
|
|
|
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Page No 5.101:
Question 28:
From the following extracts of a company, calculate Cash Flow from Investing Activities:
|
Particular |
31st March, 2021 ( `) |
31st March, 2020 ( `) |
|
Goodwill |
75,000 |
1,00,000 |
|
Patents |
1,00,000 |
75,000 |
|
Land |
90,000 |
1,00,000 |
|
Furniture |
2,46,000 |
21,000 |
|
Plant
and Machinery (Net) |
2,00,000 |
2,00,000 |
|
10%
Investments |
1,80,000 |
2,00,000 |
|
Accrued
Interest on Investments |
6,000 |
... |
Answer:
|
Cash Flow from Investing
Activities |
|||
|
|
Particulars |
Amount ( `) |
Amount ( `) |
|
|
Purchase of Patents |
(25,000) |
|
|
|
Purchase of Furniture |
(2,25,000) |
|
|
|
Interest received on Investment |
14,000 |
|
|
|
Sale of Investment |
20,000 |
|
|
|
Sale of Land |
10,000 |
|
|
|
Net Cash Used in Investing Activities |
|
(2,06,000) |
Note: It has been assumed that Investments have been sold at their Book Value at the end of the accounting period.
Working Notes:
Computation
of Interest on Investments
|
Interest on
Investments=2,00,000×10/100 Less:
Interest Accrued |
=20,000 = 6,000 |
|
Interest
Received On Investment |
= 14,000 |