Question

From the following information, find out the inflow of Cash by sale of Office equipment:

	31st March, 2022	31st March, 2021
Office Equipment	₹ 2,00,000	₹ 3,00,000

Additional Information:

Depreciation for the year 2021-22 was Rs. 40,000

Purchase of Office Equipment purchased during the year: Rs. 30,000

Part of Office Equipment sold at a profit of Rs. 12,000

Options

• ₹ 1,00,000

• ₹ 1,02,000

• ₹ 90,000

• ₹ 1,12,000

Answer 1

₹ 1,02,000

Explanation:

Given:

(1) Office Equipment:

• 31st March 2021: ₹ 3,00,000 
• 31st March 2022: ₹ 2,00,000

(2) Depreciation during 2021–22: ₹ 40,000

(3) Purchase of Office Equipment during 2021–22: ₹ 30,000

(4) Gain on sale of part of Office Equipment: ₹ 12,000

∴ Opening Balance + Purchases – Depreciation – Closing Balance = Book Value of Equipment Sold

₹ 3,00,000 + ₹ 30,000 − ₹ 40,000 − ₹ 2,00,000 = ₹ 90,000

Hence, Gain on sale = ₹ 12,000.

∴ Sale Value (Cash Inflow) = Book Value + Gain

= ₹ 90,000 + ₹ 12,000

= ₹ 1,02,000