For each of the following transactions, Calculate the resulting cash flow and state the nature of cash flow, i.e., whether it is Operating, Investing or Financing Activity:

For each of the following transactions, Calculate the resulting cash flow and state the nature of cash flow, i.e., whether it is Operating, Investing or Financing Activity:

(a) Acquired machinery for ₹ 2,50,000 paying 20% by cheque and executing a bond for the balance payable.

(b) paid ₹ 2,50,000 to acquire shares in Informa Tech Ltd. and received and dividend of ₹ 50,000 after acquisition.

(c) Sold machinery of original cost of ₹ 2,00,000 with an accumulated depreciation of ₹ 1,60,000 for ₹ 60,000.

[Ans.: (a) ₹ 50,000; Investing Activity – Outflow; (b) ₹ 2,00,000; Investing Activity Activity – Outflow; (c) ₹ 60,000; Investing Activity – Inflow.]