SOLUTION Dividend received will be cash flow from ‘investing activities’ because such income is not earned by A Ltd. from its principal revenue generating activities.
SOLUTION Investing Activity. Because Fine Garments L.td. has purchased the machinery for use in the business not for sale.
SOLUTION Increase in Working Capital will result in decrease in cash flow from operating activities. Reason is that increase in working capital is due to increase in Current assets (i.e.,…
SOLUTION Short term investments are considered as Cash & Cash Equivalent. Hence, they do not affect cash flows and therefore not considered while preparing cash flow statement.
SOLUTION Cash flow from investing activities refers to acquisition or disposal of long-term assets. It shows expenditure made with the intention to generate future income.
SOLUTION No flow. It does not involve cash.
SOLUTION No flow. Old furniture written off does not involve cash. It is a non-cash item.
SOLUTION Any one of the following: (i) Issue of Shares or Debentures for Cash (ii) Payment of Dividend on Shares (ii) Payment of Interest on Long term borrowings.
SOLUTION Following are investing activity for every type of enterprise: Purchase of GoodwillPurchase of Fixed AssetsSale of Fixed Assets.