Question

Calculate Cash Flow from Investing Activities from the following information:

1. Machinery costing ₹ 5,00,000 (Book Value ₹ 3,50,000) was sold at a loss of 10%.
2. Dividend received @ 10% from Long-term Investments of ₹ 2,00,000.
3. Receipt for permission granted for use of Trademark ₹ 1,20,000.
4. Non-Current Investments purchased ₹ 1,75,000. 
5. Non-Current Investment costing ₹ 3,00,000 was sold at a profit of 20%. 
6. Land was sold for ₹ 6,00,000, of which 40% is profit.

Answer 1

Cash Flow from Investing Activities
Particulars	Amount (₹)
Add: Cash Inflows
Machinery sold (W.N.)	3,15,000
Dividend received	20,000
Trademark receipt	1,20,000
Sale of non-current investment	3,60,000
Sale of land	6,00,000
Total Inflows	14,15,000
Less: Cash Outflows
Purchase of non-current investments	(1,75,000)
Net Cash Inflow from Investing Activities	12,40,000

Working Note for Machinery Sold:

Explanation	Calculation	Amount (₹)
Book Value of Machinery	-	3,50,000
Less: Loss @ 10% on Book Value	₹ 3,50,000 × 0.10	(35,000)
Sale Proceeds (Cash Received)	₹ 3,50,000 − ₹ 35,000	3,15,000