Question

From the following particulars, calculate cash flows from investing activities:

	Purchased (₹)	Sold (₹)
Land & Building	5,00,000	-
Machinery	3,40,000	4,50,000
Investments	4,10,000	1,50,000
Patents	-	60,000

1. Dividend received on shares held as Investments - ₹ 10,000.
2. Interest received on debentures held as Investments - ₹ 8,000.
3. Dividend paid on equity share capital - ₹ 50,000

Answer 1

Cash Flow from Investing Activities
Particulars	Amount (₹)
Purchase of Land and Building	5,00,000
Purchase of Machinery	3,40,000
Sale of Machinery	(4,50,000)
Purchase of Investments	4,10,000
Sale of Investments	(1,50,000)
Sale of Patents	(60,000)
Net Cash Used in Investing Activities	5,90,000
Less:
Dividend received (on investments)	(10,000)
Interest received (on investments)	(8,000)
Net Cash from Investing Activities	5,72,000

Note: Dividends and Interest received on investments are classified under operating activities, as per textbook rules.