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From the following information, find out the inflow of cash: 31st March, 2015 31st March, 2014 Plant and Machinery Account ₹ 6,00,000 ₹ 4,50,000 Accumulated Depreciation ₹ 1,60,000 ₹ 1,00,000 -

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Question

From the following information, find out the inflow of cash:

  31st March, 2015 31st March, 2014
Plant and Machinery Account ₹ 6,00,000 ₹ 4,50,000
Accumulated Depreciation ₹ 1,60,000 ₹ 1,00,000

Additional Information:

Depreciation for the years 2014-2015 is ₹ 80,000

During the year Machinery was purchased for ₹ 2,50,000 and a part of the asset was sold at a profit of ₹ 40,000.

Options

  • ₹ 1,20,000

  • ₹ 1,00,000

  • ₹ 80,000

  • ₹ 40,000

MCQ

Solution

₹ 1,20,000

Explanation:

Dr. Cr.
Plant and Machinery Account
Particulars Amount
(₹)
Particulars Amount
(₹)
To Balance b/d 4,50,000 By Bank A/c (Sale)
(Bal. Fig.)
1,20,000
To Bank A/c (Purchases) 2,50,000 By Accumulated Depreciation A/c 20,000
To Statement of Profit and Loss
(Profit on Sale)
40,000 By Balance c/d 6,00,000
  7,40,000   7,40,000

 

Dr. Cr.
Accumulated Depreciation account
Particulars Amount
(₹)
Particulars Amount
(₹)
To Plant and Machinery A/c
(Depreciation on Plant and Machine sold)
(Profit on Sale)
20,000 By Balance b/d 1,00,000
To Balance c/d 1,60,000 By Depreciation A/c
(Statement of Profit and Loss)
80,000
  1,80,000   1,80,000
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Preparation of Cash Flow Statement
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