Question 38 Chapter 15 of Class 12 Part – 2 – 2024

Question 38 Chapter 15 of Class 12 Part – 2 – 2024

Cash Flow From Investing Activities

38. From following particulars, calculate cash from investing activities :

Assets	31-12-2016 ₹	31-12-2017 ₹
Goodwill	2,500	7,500
Patents	7,000	4,000
Plant and Machinery	25,500	31,000
10% Long term investments	1,500	4,000
Shares of X Ltd.	2,500	2,500
Investment in Land	2,500	2,500

Additional Information
1. Patents were written off to the extent of ₹ 1,000 and some patents were sold at a profit of ₹ 500.
2. A machine costing ₹ 3,500 (Depreciation charges ₹ 1500) was sold for ₹ 1,250. Depreciation charged during the year was ₹ 3,500.
3. On 31st December, 2017, 10% Investments were purchased for investments were sold at a profit of ₹ 500. Interest on investments was received on 31st 4,500 and some December, 2017.
4. X Ltd. paid dividend @ 10% on its shares.
5. A plot of land was purchased out of surplus funds for investment purpose and let out for commercial use and rent received 750.

The solution of Question 38 Chapter 15 of Class 12 Part – 2 – 2024: – 

Cash Flow from Investing Activities
Particulars		Rs
The inflow of Cash
Sale of Patents	2,500
Sale of Machinery	1,250
Sale of Investment	2,500
Interest Received on Investment	750
Dividend Received	250
Rent Received	750	7,400
Less: Purchase of Plant
Purchase of Goodwill	5,000
Purchase of Machinery	11,000
Purchase of Investment	4,500	(20,500)
Net Cash used in investing activities		(13,100)

Working Note

Plant Account
Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	25,500	By Bank A/c (Sale)	1,250
		By Profit and Loss A/c (Loss)	750
		By Depreciation A/c	3,500
To Bank –Purchase (Bal. fig.)	11,000	By Balance c/d	31,000
	36,500		36,500

Investment Account
Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	1,500	By Bank (Sale) (Bal. fig.)	2,500
To Bank (Purchase)	1,500
To Profit & Loss A/c	4,500
		By Balance c/d	4,500
	6,500		6,500

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