Sarthaks Test
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From the foltowing 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 Limited as on .......

Liabilities         Rs.2010                         Rs.2011                            Rs.2010            Rs.2011             
10% Long term investment     60,000 1,60,0000
Investment in land1,00,0001,00,000
shares of amartax ltd1,00,0001,00,000

Additional Informations 

(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.

1 Answer

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Working Note Machine costing Rs. 1,40,000 less depreciation Rs. 60,000, present value Rs. 80,000 sold for Rs. 50,000 i.e., loss on sale Rs. 30,000.

Note: Any income received on investment is a part of investments like dividend,interest or rent received.

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