T.S. Grewal Class 12 Vol 3 Chapter 5 Q.25 - Cash Flow Statement

Question 25

Welprint Ltd. has given the following information:

Particulars	Amount (₹)
Machinery as on 1st April, 2024	50,000
Machinery as on 31st March, 2025	60,000
Accumulated Depreciation on 1st April, 2024	25,000
Accumulated Depreciation on 31st March, 2025	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.

Solution

Cash Flow from Investing Activities

Particulars	Amount (₹)	Amount (₹)
Purchase of Machinery (WN1)	(35,000)
Sale of Machinery	13,000	(22,000)
Cash Used in Investing Activities		(22,000)

Working Note 1: Machinery Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	50,000	By Bank A/c (Sale)	13,000
To Statement of Profit and Loss (Profit on Sale, 13,000 − 10,000)	3,000	By Accumulated Depreciation A/c	15,000
To Bank A/c (Purchase, balancing figure)	35,000	By Balance c/d	60,000
Total	88,000	Total	88,000

Working Note 2: Accumulated Depreciation Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Machinery A/c	15,000	By Balance b/d	25,000
To Balance c/d	15,000	By Statement of Profit and Loss (Depreciation charged during the year, balancing figure)	5,000
Total	30,000	Total	30,000