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

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

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