Question

Categorise each of the following items into operating/investing/financing activities while preparing the Cash Flow Statement: 

1. Redemption of 2,00,000, 12% preference shares of ₹ 10 each at a premium of ₹ 4 per share.
2. Sale of machinery for ₹ 40,000.
3. Declared and paid a dividend of ₹ 1,00,000.
4. Interest collected from investments ₹ 28,000.

Answer 1

Operating Activities	Investing Activities	Financing Activities
	Sale of machinery for ₹ 40,000.	Redemption of 2,00,000, 12% preference shares of ₹ 10 each at a premium of ₹ 4 per share.
	Interest collected from investments ₹ 28,000.	Declared and paid a dividend of ₹ 1,00,000.