4 :- For each of the following transactions, Calculate the resulting cash flow and state the nature of cash flow, i.e., whether it is Operating, Investing or Financing Activity:
(a) Acquired machinery for Rs 2,50,000 paying 20% by cheque and executing a bond for the balance payable.
(b) Paid Rs 2,50,000 to acquire shares in Informa Tech Ltd. and received and dividend of Rs 50,000 after acquisition.
(c) Sold machinery of original cost of Rs 2,00,000 with an accumulated depreciation of Rs 1,60,000 for Rs 60,000.
Solution :-
(a) 2,50,000 x 20% = Rs 50,000 , Investing Activity – Outflow
(b) 2,50,000 – 50,000 = Rs 2,00,000, Investing Activity – Outflow
(c) 60,000, Investing Activity – Inflow