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12th | Cash Flow Statement | Question No. 25 To 28 | Ts Grewal Solution 2024-2025

Question 25:

Welprint Ltd. has given the following information:

`

Machinery as on 1st April, 2022

50,000

Machinery as on 31st March, 2023

60,000

Accumulated Depreciation on 1st April, 2022

25,000

Accumulated Depreciation on 31st march, 2023

15,000

During the year, a machine costing  ` 25,000 (accumulated depreciation thereon  ` 15,000) was sold for  ` 13,000.

Calculate Cash Flow from Investing Activities on the basis of the above information.

Answer:

Cash Flow Statement

 

Particulars

 (`)

 (`)

 

Cash Flow from Investing Activities

 

 

 

Purchase of Machinery

(35,000)

 

 

Sale of Machinery

13,000

(22,000)

 

Cash Used in Investing Activity

 

(22,000)


Working Notes:

Machinery Account

Dr.

 

Cr.

Particulars

 (`)

Particulars

 (`)

Balance b/d

50,000

Bank A/c

13,000

Profit and Loss A/c

3,000

Accumulated Depreciation A/c

15,000

Bank A/c (Bal. Fig.)

35,000

Balance c/d

60,000

 

88,000

 

88,000

 

 

 

 

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

 (`)

Particulars

 (`)

Machinery A/c

15,000

Balance b/d

25,000

Balance c/d

15,000

Profit and Loss A/c
(Bal. Fig.)

5,000

 

30,000

 

30,000

 

 

 

 

                    

Question 26:

From the following extracts of a company, calculate Cash Flow from Investing Activities:

Particular

31st March,

2023

(`)

31st March,

2022

(`)

Goodwill

75,000

1,00,000

Patents

1,00,000

75,000

Land

90,000

1,00,000

Furniture

2,46,000

21,000

Plant and Machinery (Net)

2,00,000

2,00,000

10% Investments

1,80,000

2,00,000

Accrued Interest on Investments

6,000

...

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(`)

Amount

(`)

 

Purchase of Patents

(25,000)

 

 

Purchase of Furniture

(2,25,000)

 

 

Interest received on Investment

14,000

 

 

Sale of Investment

20,000

 

 

Sale of Land

10,000

 

 

Net Cash Used in Investing Activities

 

(2,06,000)

Note: It has been assumed that Investments have been sold at their Book Value at the end of the accounting period.

Working Notes:

Computation of Interest on Investments

Interest on Investments=2,00,000×10/100

Less: Interest Accrued

=20,000

= 6,000

Interest Received On Investment

= 14,000

 

Question 27:

From the following information, calculate Cash Flow from Investing Activities

Particular

31st March,
2023

(`)

31st March,
2022

(`)

Plant and Machinery

10,00,000

8,50,000

Investment (Long-term)

1,00,000

40,000

Land (At Cost)

1,00,000

2,00,000

Additional Information:
1. Depreciation charged on Plant and Machinery  ` 50,000.
2. Plant and Machinery with a Book Value of  ` 60,000 was sold for  ` 40,000.
3. Land was sold at a profit of  ` 60,000.
4. No investment was sold during the year.

Answer:

Cash Flow from Investing Activities

 

Particulars

 (`)

 (`)

 

Purchase of Plant and Machinery (WN1)

(2,60,000)

 

 

Purchase of Investments

(60,000)

 

 

Sale of Plant and Machinery (WN1)

40,000

 

 

Sale of Land (WN2)

1,60,000

 

 

Net Cash Used in Investing Activities

 

(1,20,000)

Working Notes:

WN1

Plant and Machinery Account

Dr.

Cr.

Particulars

 (`)

Particulars

 (`)

Balance b/d

8,50,000

Depreciation A/c

50,000

Bank A/c (Purchases- Bal. Fig.)

2,60,000

Bank A/c (Sale)

40,000

 

 

Profit and Loss A/c (Loss on Sale)

20,000

 

 

Balance c/d

10,00,000

 

11,10,000

 

11,10,000

 

 

 

 

WN2

Land Account

Dr.

Cr.

Particulars

 (`)

Particulars

 (`)

Balance b/d

2,00,000

Bank A/c (Sale- Bal. Fig.)

1,60,000

Profit and Loss A/c (Profit on Sale)

60,000

Balance c/d

1,00,000

 

2,60,000

 

2,60,000

 

 

 

 

 

Question 28:

From the following particulars, calculate Cash Flow from Investing Activities

 

 

 

Particulars

Purchased (`)

Sold

(`)

Machinery

6,20,000

2,00,000

Investments

2,40,000

80,000

Goodwill

1,00,000

...

Patents

...

1,50,000

 

 

 

 

 

 

Additional Information:

1. Interest received on debentures held as investment ` 8,000.

2. Interest paid on debentures issued ` 20,000.

3. Dividend received on shares held as investment ` 20,000.

4. Dividend paid on Equity Share Capital ` 30,000.

5. A plot of land was purchased out of the surplus funds for investment purposes and was let out for commercial use. Rent received  ` 50,000 during the year.

Answer:

Cash Flow from Investing Activities

 

Particulars

 (`)

 (`)

 

Purchase of Machinery

(6,20,000)

 

 

Purchase of Investments

(2,40,000)

 

 

Purchase of Goodwill

(1,00,000)

 

 

Sale of Machinery

2,00,000

 

 

Rent Received

50,000

 

 

Dividend Received

20,000

 

 

Sale of Investments

80,000

 

 

Interest on Debentures

8,000

 

 

Sale of Patents

1,50,000

 

 

Net Cash Used in  Investing Activities

 

(4,52,000)

 

Note: Dividend paid and interest paid is a part of Financing Activities.

 

 

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Ts Grewal Solution 2024-2025

Class 12 / Volume – 3

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