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Cash Flow Statement 4.31
Illustration 17. From the following information, calculate Cash Flow from Investing
Activities of X Ltd.:
Particulars 31st March, 2023 (`) 31st March, 2024 (`)

1. Investments @ 10% 2,50,000 5,00,000
2. Plant 8,75,000 11,90,000

Additional Information:
1. Half of the investments held in the beginning of the year were sold at 10% gain (profit).
2. Depreciation on Plant was ` 1,00,000 for the year.

3. Interest received on investments—` 35,000.
4. Dividend received on investments—` 15,000.

5. Rent received—` 10,000.
Solution: CASH FLOW FROM INVESTING ACTIVITIES

Particulars `
Proceeds from Sale of Investments 1,37,500
Purchase of Investments (WN 1) (3,75,000)
Purchase of Plant (WN 2) (4,15,000)
Interest Received 35,000
Dividend Received 15,000
Rent Received 10,000
Cash Used in Investing Activities (5,92,500)

Working Notes:

1. Dr. INVESTMENTS ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d (Opening) 2,50,000 By Bank A/c (Sale) 1,37,500
To Gain on Sale of Investment A/c 12,500 (` 2,50,000 × ½ = ` 1,25,000)
(Statement of Profit & Loss) (Gain 10% of ` 1,25,000 = ` 12,500)
To Bank A/c (Purchase of Investments) 3,75,000 By Balance c/d 5,00,000
(Balancing Figure)
6,37,500 6,37,500

2. Dr. PLANT ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d (Opening) 8,75,000 By Depreciation A/c 1,00,000
To Bank A/c (Purchase) 4,15,000 By Balance c/d 11,90,000
(Balancing Figure)
12,90,000 12,90,000