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Question :                                      

                                         Balance sheet (Extract) 

Liabilities

31-03-2021

31-03-2022

12% Debentures

 Rs.200000

Rs. 160000

Additional Information
Interest on debentures is paid on half yearly basis on 30th September and 31st March each year. Debentures were redeemed on 30th September 2021.

How much amount (related to the above information) will be shown in the Financing Activity for Cash Flow Statement prepared on 31st March 2022?

 

Option 1:  Outflow Rs.40,000

Option 2: Inflow Rs.42,600

Option 3: Outflow Rs.61,600

Option 4: Outflow Rs.64,000


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 17th Jan, 2024

Correct Answer: Outflow Rs.61,600


Solution : Cash flow from financing activities :

Redeemption of Debenture = Rs.40000

Interest on Debenture         =  Rs.21600

Total                                    =   Rs.61600

Interest on debentures
= 1,60,000 x 12/100 + 40,000 x 12/100 x 6/100
= ₹ 19,200 + ₹ 2,400
= ₹ 21,600

Hence the correct answer is option 3.

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