Question : M/s Deva and Sons a bamboo pen producing company, Purchased Machinary for Rs.9,00,000. It received dividend of Rs.70,000 on investment of shares. The company also sold an old machine with the book value of Rs.79,000 at a loss of Rs.10,000. Compute the amount of cash flow used from/in Investing activity?
Option 1: Rs.5,61,000
Option 2: Rs.4,61,000
Option 3: Rs.7,61,000
Option 4: None of the Above
Correct Answer: Rs.7,61,000
Solution : The cash Generated (or spent) on non current asset that are expected to generate profit in future is refereed to as the cash flow from investing activity.
Hence the correct answer is option 3.
Question : Deva and Co., a pen-producing company, purchased machinery for Rs.9,00,000. It receives a dividend of Rs.70,000 on investment in shares. The company also sold an old machine with a book value of Rs.79,000 at a loss of Rs.10,000. Compute the amount of cash flow used from/in investing activities -
Option 1: Rs.(7,61,000)
Option 2: Rs.7,61,000
Option 3: Rs.(7,11,000)
Option 4: Rs.7,11,000
Question : AbC Ltd. purchased machinery of Rs. 20,00,000 issuing a cheque of Rs. 5,00,000 and 10% Debentures of Rs. 15,00,000. In the Cash Flow Statement, the transaction will be shown as
Option 1: Outflow under Investing Activity Rs. 20,00,000, inflow under Financing Activity as Receipt for Debentures Rs. 15,00,000
Option 2: Outflow under investing Activity Rs. 5,00,000
Option 3: Inflow of Rs. 15,00,000 as Financing Activity.
Option 4: None of the above
Question : Prince Ltd. purchased machinery of Rs.10,00,000 issuing a cheque of Rs.2,50,000 and 10% Debentures of Rs.7,50,000. In the Cash Flow Statement, the transaction will be shown as _____.
Option 1: Outflow under Investing Activity Rs.10,00,000, inflow under Financing Activity as Receipt for debentures Rs.7,50,000.
Option 2: Outflow under Investing Activity Rs.2,50,000
Option 3: Inflow of Rs.7,50,000 as Financing Activity
Question : Which activities are same for computation of direct and indirect method?
Option 1: Cash Flow from Financing activity and cash flow from Investing activity
Option 2: Cash Flow from Operating activity and cash flow from Investing activity
Option 3: Cash Flow from Operating activity and cash flow from Financing activity
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