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M.514 An Aid to Accountancy—CBSE XII

(b) CASH FLOW FROM INVESTING ACTIVITIES

Particulars `
Purchase of Machinery (WN 1) (2,40,000)
Sale of Machinery 36,000
Cash Used in Investing Activities (2,04,000)
Working Notes:
1. Dr. MACHINERY ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 2,50,000 By Bank A/c (Sale Proceeds)* 36,000
To Gain (Profit) on Sale of Machinery A/c 6,000 By Accumulated Depreciation A/c 50,000
(Statement of Profit and Loss) By Balance c/d 4,10,000
To Bank A/c (Purchase)—Balancing Figure 2,40,000
4,96,000 4,96,000

`
*Book Value of Machinery on the date of Sale (` 80,000 – ` 50,000) 30,000
Add: Gain (Profit) on Sale of Machinery (20% of ` 30,000) 6,000
Sale Proceeds 36,000

2. Dr. ACCUMULATED DEPRECIATION ACCOUNT Cr.
Particulars ` Particulars `
To Machinery A/c—Transfer 50,000 By Balance b/d 60,000
To Balance c/d 90,000 By Statement of Profit and Loss 80,000
(Depreciation Current Year)
(Balancing Figure)
1,40,000 1,40,000