For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow, viz., operating, investing and financing. (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. and received a dividend of Rs. 50,000 after acquisition. (c) Sold machinery of original cost Rs. 2,00,000 with an accumulated depreciation of Rs. 1,60,000 for Rs. 60,000.
Rs. 50,000 (Investing Activity - Outflow)
Rs. 2,00,000 (Investing Activity - Outflow)
Rs. 60,000 (Investing Activity - Inflow)
Explanation
The provided textbook context explicitly lists the answers for these transactions. For transaction (a), only the cash portion (20%) is considered an outflow. For transaction (b), the dividend received is deducted from the purchase price to find the net outflow. For transaction (c), the sale proceeds represent the cash inflow. All transactions relate to fixed assets or investments, classifying them as Investing Activities.