Financial Statements

Cash Flow

Medium

Financial Statements

XYZ Ltd. has given you the following information:

Machinery as on April 01, 2025 Rs. 50,000

Machinery as on March 31, 2026 Rs. 60,000

Accumulated Depreciation as on April 01, 2025 Rs. 25,000

Accumulated Depreciation as on March 31, 2026 Rs. 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 above information.

Net cash used in Investing Activities Rs. (22,000)

Cash flow from Investing Activities Rs. 13,000

Net cash used in Investing Activities Rs. (35,000)

Net cash used in Investing Activities Rs. (17,000)

✅ Correct Option: 1

Machinery A/c at cost: Opening $50,000$ less cost of machine sold $25,000$ gives $25,000$ . To reach the closing balance of $60,000$ , purchases $= 35,000$ (outflow).

Sale proceeds $= 13,000$ (inflow).

Net cash used in investing activities $= 13,000 - 35,000 = (22,000)$ .

The profit or loss on sale is not shown here, as it belongs to operating activities.

2023: 11 June Shift 3

Calculate the amount of cash from sale of machinery from the following items :

A machine costing Rs. 20,000 having book value of Rs. 15,000 is sold for Rs. 12,000 and depreciation charged during the year was Rs. 8,000. The opening and closing balance in machinery account was Rs. 1,80,000 and Rs. 1,72,000 respectively.

2026: 13 May Shift 2

The balance sheet shows Provision for Taxation of Rs. 80,000 and Rs. 95,000 for the year 2023-24 and 2024-25 respectively. Tax paid during the year 2024-25 is Rs. 60,000. What will be the amount of tax to be added while calculating net profit before tax and extra ordinary items in preparing cash flow statement?

2023: 28 May Shift 1

Match List - I with List - II.

List - I	List - II
(A) The Accounting basis for Cash Flow Statement is	(I) Investment in shares
(B) Dividend paid on Equity and Preference capital comes under	(II) Cash Basis
(C) It can not be considered as cash and cash equivalents	(III) Treasury bills
(D) It can be classified as cash and cash equivalents	(IV) Cash outflow from Financing Activities

Choose the correct answer from the options given below :

2022: 20 Aug Shift 2

Following items are categorised under Operating Activities:

A. Purchase of Goodwill

B. Transfer to General Reserve

C. Issue of fresh shares

D. Gain on sale of machinery

Choose the correct answer from the options given below:

2026: 13 May Shift 1

From the following information, calculate cash flow from financing activities:

	April 1, 2025	March 31,2026
Long-term Loans	Rs. 2,00,000	Rs. 2,50,000

During the year, the company repaid a loan of Rs. 1,00,000.

2026: 11 May Shift 1

LK Ltd acquired shares in Informa Tech. and paid Rs. 2,50,000 as purchase consideration and received a dividend of Rs. 50,000 after the acquisition. Calculate the resulting cash flow of LK Ltd.

Solution

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