Question

For each of the following transactions, calculate the resulting Cash Flow and state the nature of Cash Flow, i.e., whether it is Operating, Investing or Financing:
(a) Acquired machinery for ₹2,50,000 paying 20% by cheque and executing a bond for the balance payable.

(b) Paid ₹2,50,000 to acquire shares in Informa Tech Ltd. and received a dividend of ₹50,000 after acquisition.

(c) Sold machinery of original cost of ₹2,00,000 with an accumulated depreciation of ₹1,60,000 for ₹60,000.

Answer 1

(a) Investing Activity: 50,000
(b) Investing Activity: 2,00,000
(c) Investing Activity: 60,000