ABC Ltd. has given you the following information:

	Rs.
Machinery as on April 01, 2024	50,000
Machinery as on March 31, 2025	60,000
Accumulated Depreciation on April 01, 2024	25,000
Accumulated Depreciation on March 31, 2025	15,000

During the year, a Machine costing Rs. 25,000 with Accumulated Depreciation of Rs. 15,000 was sold for Rs. 13,000.

Calculate cash flow from Investing Activities on the basis of the above information.

To find cash flow from investing activities, we need to determine the cash paid for purchase of machinery and cash received from sale of machinery.

Finding Purchase of Machinery:

Using the Machinery Account relationship:

Opening Balance + Purchases - Cost of Machine Sold = Closing Balance

50,000 + Purchases - 25,000 = 60,000

Purchases = 60,000 - 50,000 + 25,000 = Rs. 35,000

We can verify this is correct by checking the Accumulated Depreciation account:

Opening Accumulated Depreciation - Accumulated Depreciation on Sold Machine + Depreciation for the year = Closing Accumulated Depreciation

25,000 - 15,000 + Depreciation = 15,000

Depreciation for the year = Rs. 5,000 ✓

Cash Flow from Investing Activities:

Cash Inflow from sale of machinery = Rs. 13,000

Cash Outflow for purchase of machinery = Rs. 35,000

Net Cash Flow = 13,000 - 35,000 = Rs. 22,000 (Outflow)

Since outflow exceeds inflow, there is a net cash outflow of Rs. 22,000 from investing activities.