ABC Ltd. has given you the following information:AccountsApril 01, 2024 (Rs.)March 31, 2025 (Rs.)Machinery50,00060,000Accumulated Depreciation25,00015,000During the year, a machine costing Rs. with Accumulated Depreciation of Rs. was sold for Rs. .Calculate cash flow from Investing Activities on the basis of the above information.
- ARs. 22,000 Outflow
- BRs. 22,000 Inflow
- CRs. 21,000 Outflow
- DRs. 21,000 Inflow
Solution & Step-by-step Explanation
Let's reconstruct the Machinery ledger to evaluate purchases or sales cash flows:Step 1: Reconstruct the Machinery Account (at cost):Opening Balance = Rs. Closing Balance = Rs. Cost of Machine Sold = Rs. $
$
Step 2: Collect the Cash Inflow from Sale:
Step 3: Calculate net cash flow from Investing Activities:
A negative result indicates a net Outflow of Rs. 22,000.
$
Step 2: Collect the Cash Inflow from Sale:
Step 3: Calculate net cash flow from Investing Activities:
A negative result indicates a net Outflow of Rs. 22,000.