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Calculate and state the nature of activity under cash flow statement :

Acquired Machinery for Rs. 5,00,000 paying 50% by cheque and executing a bond for the balance payable :

Solution

✅ Correct Option: 4

Only the cash portion of the machinery acquisition is reported in the cash flow statement.

Cash paid = 5,00,000 x 50% = 2,50,000 (outflow).

This is classified as an Outflow from Investing Activity. The bond executed for the balance is a non-cash transaction.

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