Question

Which of the following transactions will result in the flow of cash :
(1) Deposited Rs 43,000 into the bank.
(2) Withdrew cash from bank Rs 23,000.
(3) Sale of the machinery of the book value of Rs 38,000 at a loss of Rs 3,000.
(4) Converted Rs 2,00,000, 9% debentures into equity shares.

Answer 1

Sale of the machinery of the book value of Rs 38,000 at a loss of Rs 3,000.

Sale of the machinery of the book value Rs 38,000 at a loss of Rs 3,000 implies that only Rs 35,000 will be received in cash. This is the only transaction that results in flow (inflow) of cash into the business.