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Question 6:

From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also show the workings clearly preparing the ledger accounts:

Balance Sheet of Bharat Gas Ltd. as on .............  
Particulars Note No. Figures as the end of 2011
(Rs)
Figures as at the
end of reporting 2010
(Rs)
II) Assets      
1. Non-current Assets
     
a) Fixed assets
     
i) Tangible assets
1 12,40,000 10,20,000
ii) Intangible assets
2 4,60,000 3,80,000
b) Non-current investments
3 3,60,000 2,60,000

 

Notes 1 Tangible assets = Machinery
  2 Intangible assets = Patents

Notes

  Figures of current year Figures of previous year
     
1. Tangible Assets    
Machinery
12,40,000 10,20,000
2. Intangible Assets          
Goodwill
3,00,000 1,00,000
Patents
1,60,000 2,80,000
    4,60,000 3,80,000
3. Non-current Investments          
10% long term investments  
1,60,000 60,000
Investment in land  
1,00,000 1,00,000
Shares of Amartex Ltd.  
1,00,000 1,00,000
    3,60,000 2,60,000
           


Additional Information:

(a) Patents were written-off to the extent of Rs. 40,000 and some Patents were sold at a profit of Rs. 20,000.

(b) A Machine costing Rs. 1,40,000 (Depreciation provided thereon Rs. 60,000) was sold for Rs. 50,000. Depreciation charged during the year was Rs. 1,40,000.

(c) On March 31, 2007, 10% Investments were purchased for Rs. 1,80,000 and some Investments were sold at a profit of Rs. 20,000. Interest on Investment was received on March 31, 2011.

(d) Amartax Ltd. paid Dividend @ 10% on its shares.

(e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs. 30,000.

Answer:

Cash Flow from Investing Activities

Particulars

Amount

Rs

Amount

Rs

Cash Inflow

 

 

 

Proceeds from Sale of Patents

1,00,000

 

 

Proceeds from Sale of Machinery

50,000

 

 

Proceeds from Sale of 10% Long-term Investment

1,00,000

 

 

Interest received on 10% Long-term Investment

6,000

 

 

Dividend Received from Amartax Ltd.

10,000

 

 

Rent Received

30,000

2,96,000

Cash Outflow

 

 

 

Purchase of Goodwill

(2,00,000)

 

 

Purchase of Machinery

(4,40,000)

 

 

Purchase of 10% Long-term Investment

(1,80,000)

(8,20,000)

Net Cash used in Investing Activities

 

(5,24,000)

 

 

 

 

 

         

 

Patents Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

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