Question

From the above information, ‘Cash flows from investing activities’ will be:
\begin{tabular}{|c|c|c|} & Purchased (\( \text{\rupee} \)) & Sold (\( \text{\rupee} \))
Investments & 2,00,000 & 1,80,000
Goodwill & 3,00,000 &
\end{tabular}

• A. Inflow \rupee 3,20,000
• B. Outflow \rupee 3,20,000
• C. Outflow \rupee 20,000
• D. Inflow \rupee 20,000

Hint:

For cash flows from investing activities, consider both purchases (cash outflow) and sales (cash inflow) of non-current assets like investments, goodwill, and property.

Answer 1

The Correct Option is B

Step 1: Understanding the data Investments were purchased for \rupee 2,00,000 and sold for \rupee 1,80,000, resulting in a net cash outflow of \rupee 20,000. Goodwill was purchased for \rupee 3,00,000, which is a cash outflow. Step 2: Calculating total cash flow from investing activities Total cash flow = Outflow from goodwill + Net outflow from investments = \rupee 3,00,000 + \rupee 20,000 = \rupee 3,20,000. Thus, the correct answer is \( \mathbf{(B)} \) Outflow \rupee 3,20,000.