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 :
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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