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Question
| Asset | Purchased (₹) | Sold (₹) |
| Investments | 2,00,000 | 1,80,000 |
| Goodwill | 3,00,000 | ..... |
From the above information, ‘Cash flows from investing activities’ will be;
Options
Inflow ₹ 3,20,000
Outflow ₹ 3,20,000
Outflow ₹ 20,000
Inflow ₹ 20,000
MCQ
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Solution
Outflow ₹ 3,20,000
Explanation:
Purchasing assets leads to a cash outflow (spending money), while selling them results in a cash inflow (receiving money). In this transaction, the total cash outflows from purchasing Investments (₹ 2,00,000) and Goodwill (₹ 3,00,000) amount to ₹ 5,00,000. Offsetting this with the cash inflow of ₹ 1,80,000 from the sale of investments leaves a net negative balance of ₹ 3,20,000, which represents a net cash outflow under investing activities.
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