Question

Sha
Amount
When Capital is Fixed
The following Balance Sheet shows the position of A, B, and C on 31st March, 2017 :
Assets
Amount
Liabilities
₹
Creditors
20,000 Cash
Reserve
15,000 Stock
Capital A/cs :
Machinery
A
25,000 Debtors
B
15,000/B/R
C's Capital Alc
75,000
₹
6,000
20,000
20,000
10,000
10,000
9,000
75,000
А.
It was decided to dissolve the firm. C became insolvent and * 2,000 only were received from
his estate. The assets realised as under:
From Bills Receivable * 7,000; from Stock and Debtors 25% less than the book value; from
Machinery + 14,000. Realisation expenses amounted to * 2,500.
Assuming Capital Accounts as fixed, prepare Realisation Account, Capital Accounts and Cash
Account according to Garner Vs. Murray decision.
(Ans. Realisation Loss : * 19,000, C's Deficiency * 8,334 shared by A* 5,209 and B * 3,125
Cash Ale Total 64.166.1​

Answer 1

Answer:

Cash Used in Investing Activities = ₹ 2,00,000

Explanation:

Cash Flow From for the year ended 31st March, 2019

                              Particulars                                         Rupees                                

I. Cash Flow from Investing Activities              NIL                        

Sale of Machine                                                 1,50,000  

Less: Purchase of Machinery (WN 1)                 1,50,000  

Less: Purchase of Non-Current Investments       2,00,000              2,00,000

Net Cash Used in Investing Activities                                                  2,00,000

_________________________________________________

                  Plant and Machinery Account

Particulars                   Rs                Particular                  Rs

To Balance b/d                5,00,000        By Bank A/c (Sale)              1,50,000

To Bank A/c(Purchase)   1,50,000   By Balance c/d               5,00,000

                                    6,50,000                                         6,50,000