Question 29 Chapter 5 of +2-B – T.S. Grewal 12 Class

Question 29 Chapter 5 of +2-B

Question 29 Chapter 5 of +2-B

29. Calculate Cash Flow from Investing Activities from the following information:

Particulars 31st March, 31st March,
  2019 Rs 2018 Rs 
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 as an investment out of surplus. It was let out for commercial
purpose and the rent received was Rs 20,000.
2. Dividend received from Damodar Ltd. @ 12%.
3. Patents written off to the extent of Rs 20,000. Some patents were sold at a profit of Rs 10,000.
4. A machine costing Rs 80,000 (depreciation provided thereon Rs 30, 000) was sold for 35,000.
Depreciation charged during the year was Rs 70,000.
5. During the year 12% investments were purchased for Rs 1,00,000 and some investments
were sold at a profit of Rs 10,000. Interest on investments for the year was duly received.

 

The solution of Question 29 Chapter 4 of +2-B: –

 


Cash Flow From for the year ended 31st March, 2019
Particulars
Rs
I. Cash Flow from Investing Activities    
Rent Received 20,000  
Dividend Received 18,000  
Sale of Plant and Machinery (WN 1) 35,000  
Sale of Investment (WN 2) 80,000  
Interest on Investments* 6,000  
Sale of Patents (WN 3) 20,000  
Less: Purchase of Plant and Machinery 2,70,000  
Less: Purchase of Investment 1,00,000  
Less: Purchase of Goodwill 50,000 2,41,000
Net Cash Used in Investing Activities   2,41,000

 

*Interest on Investment:-

Interest on Investment = 12%
  = Rs 2,00,000 X 12%
  = Rs 6,000

 

Plant and Machinery Account
Particulars
Rs Particular Rs
To Balance b/d 6,00,000 By Depreciation A/c 70,000
To Bank A/c (Purchase) (Bal. Fig.) 2,70,000 By Bank A/c (Sale) 35,000
    By Loss on Sale (Profit and Loss A/c) 15,000
    By Balance c/d 7,50,000
  8,70,000   8,70,000

 

Investments Account
Particulars
Rs Particular Rs
To Balance b/d 50,000 By Bank A/c (Sale) 80,000
To Bank A/c (Purchase) (Bal. Fig.) 1,00,000 By Balance c/d 80,000
To Profit on sale (Profit and Loss A/c) 10,000    
       
  1,60,000   1,60,000

 

Investments Account
Particulars
Rs Particular Rs
To Balance b/d 1,00,000 By Profit & loss A/c (Written-off) 20,000
To Profit on sale (Profit and Loss A/c) 10,000 By Bank A/c (Sale) (Bal. fig.) 20,000
    By Balance c/d 70,000
       
  1,10,000   1,10,000


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Also, Check out the solved question of previous Chapters: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 29 Chapter 5 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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