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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate Cash Flow from Investing Activities from the following information:
| Particulars | 31st March, 2025 (₹) | 31st March, 2024 (₹) |
|---|---|---|
| Investment in Land | 3,00,000 | 3,00,000 |
| Shares in Damodar Ltd. | 1,50,000 | 1,50,000 |
| 12% Long-term Investments | 80,000 | 50,000 |
| Plant and Machinery | 7,50,000 | 6,00,000 |
| Patents | 70,000 | 1,00,000 |
| Goodwill | 1,50,000 | 1,00,000 |
Additional Information:
1. A piece of land was purchased (in an earlier year) as an investment and let out for commercial purposes; rent received this year was ₹20,000.
2. Dividend received from Damodar Ltd. @ 12%.
3. Patents written off to the extent of ₹20,000. Some patents were sold at a profit of ₹10,000.
4. A machine costing ₹80,000 (depreciation provided thereon ₹30,000) was sold for ₹35,000. Depreciation charged during the year was ₹70,000.
5. During the year, 12% investments were purchased for ₹1,00,000 and some investments were sold at a profit of ₹10,000. Interest on investments for the year was duly received.
Cash Flow from Investing Activities
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| Purchase of Plant and Machinery (WN1) | (2,70,000) | |
| Purchase of Investments (WN2) | (1,00,000) | |
| Purchase of Goodwill (1,50,000 − 1,00,000) | (50,000) | |
| Rent Received | 20,000 | |
| Dividend Received (1,50,000 × 12%) | 18,000 | |
| Sale of Plant and Machinery | 35,000 | |
| Sale of Investments (WN2) | 80,000 | |
| Interest on Investments (WN3) | 6,000 | |
| Sale of Patents (WN4) | 20,000 | |
| Net Cash Used in Investing Activities | (2,41,000) |
Note: Investment in Land and Shares in Damodar Ltd. are unchanged during the year, so only their income (Rent, Dividend) features here, with no purchase/sale line.
Working Note 1: Plant and Machinery Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 6,00,000 | By Depreciation A/c | 70,000 |
| To Bank A/c (Purchase, balancing figure) | 2,70,000 | By Bank A/c (Sale) | 35,000 |
| By Statement of Profit and Loss (Loss on Sale, 50,000 − 35,000) | 15,000 | ||
| By Balance c/d | 7,50,000 | ||
| Total | 8,70,000 | Total | 8,70,000 |
Working Note 2: 12% Long-Term Investments Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 50,000 | By Bank A/c (Sale, balancing figure) | 80,000 |
| To Bank A/c (Purchase) | 1,00,000 | By Balance c/d | 80,000 |
| To Statement of Profit and Loss (Profit on Sale) | 10,000 | ||
| Total | 1,60,000 | Total | 1,60,000 |
Working Note 3: Interest on Investments — 12% of ₹50,000 (opening balance) = ₹6,000
Working Note 4: Patents Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 1,00,000 | By Statement of Profit and Loss (Written Off) | 20,000 |
| To Statement of Profit and Loss (Profit on Sale) | 10,000 | By Bank A/c (Sale, balancing figure) | 20,000 |
| By Balance c/d | 70,000 | ||
| Total | 1,10,000 | Total | 1,10,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 5 Q.29 - Cash Flow Statement", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 5 - Cash Flow Statement.
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