T S Grewal Solutions 2026-27 [Class 12] – Cash Flow Statements– Q 21 to 30

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Solution for Q 21 to 30 of Chapter 5 of Book 3 - Analysis of Financial Statements of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Cash Flow Statements class 12. These Solutions are based on topics Calculation of operating profit before working capital changes, cash flow from operating activities, cash flow from investing activities

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.

These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 21

Cash Flow from Investing Activities

Purchase of Machinery				-100000

Cash used in investing activities				-100000

Note :

Since only 10% payment is made to cash outflow as

of now is only Rs 100000 (1000000 X 10/100)

Note : for Reference, not asked in the question

Journal entry passed at the time of purchase of machine

Machinery A/c Dr..	1000000
To Cash A/c		100000
To Bills Payable A/c		900000	after 3 months

▶ Video Solution: Coming Soon

Question 22

Machinery A/c

Particulars	Amount	Particulars	Amount
To Balance B/d	960000	By Balance C/d	1050000
To Profit on sale	15000	By Depreciation	35000
To Bank A/c	155000	By Bank A/c	45000

Total	1130000		1130000

Cash Flow from Investing Activities
Purchase of Machinery				-155000
Sale of Machinery				45000

Net Cash used in investing activities				-110000

▶ Video Solution: Coming Soon

Question 23

Investments A/c

Particulars	Amount	Particulars	Amount
To Balance B/d	500000	By Balance C/d	1000000
To Profit on sale	25000
To Bank A/c	750000	By Bank A/c	275000
(Purchase Value)		(Sale Value)
Total	1275000		1275000

Land and Building

Particulars	Amount	Particulars	Amount
To Balance B/d	900000	By Balance C/d	1500000
		By Depreciation A/c	50000
To Bank A/c	650000
(purchase)
Total	1550000		1550000

Cash Flow from Investing Activities
Purchase of investments				-750000
Sale of investments				275000
Purchase of Land and Building				-650000
Interest on investments				75000

Cash used in investing activities				-1050000

▶ Video Solution: Coming Soon

Question 24

Machinery A/c

Particulars	Amount	Particulars	Amount
To Balance B/d	950000	By Balance C/d	1000000
To Profit on sale	20000	By Acc Depreciation A/c	60000
To Bank A/c	140000	By Bank A/c (sale)	50000
(New Purchases)
Total	1110000		1110000

Accumulated Depreciation A/c

Particulars	Amount	Particulars	Amount
To Balance C/d	150000	By Balance B/d	110000
To Machinery A/c	60000	By Depreciation A/c	100000
		(for the yr , Bal Figure)

Total	210000		210000

Patents A/c

Particulars	Amount	Particulars	Amount
To Balance B/d	300000	By Balance C/d	200000
To Profit on Sale	40000	By Amortization	50000
		By Bank A/c	90000
		(Bal Figure)

Total	340000		340000

Cash Flow from Investing Activities
Purchase of Machinery				-140000
Sale of Machinery				50000
Sale of Patents				90000

Net cash outflow from investing activities				0

Note :

Profit on Sale of Machinery

Cost		90000
Less - Dep		60000

WDV/BV		30000
Sale		50000

profit		20000

▶ Video Solution: Coming Soon

Question 25

Machinery A/c

Particulars	Amount	Particulars	Amount
To Balance B/d	5000000	By Balance C/d	7000000
To Profit on sale	10000	By Acc Depreciation A/c	90000
To Bank A/c	2090000	By Bank A/c (sale)	10000
(New Purchases)
Total	7100000		7100000

Accumulated Depreciation A/c

Particulars	Amount	Particulars	Amount
To Balance C/d	1000000	By Balance B/d	800000
To Machinery A/c	90000	By Depreciation A/c	290000
		(for the yr)

Total	1090000		1090000

Cash Flow from Investing Activities
Purchase of Machinery				-2090000
Sale of Machinery				10000

Net cash outflow from investing activities				-2080000

Note :

Sale value of machinery

Cost		140000
Less - Acc Dep		90000

WDV/BV		50000
Add - Gain		10000

Sale value		60000

▶ Video Solution: Coming Soon

Question 26

Cash Flow from Investing Activities		Remarks
Purchase of patents	-25000
Sale of Land	10000
Purchase of furniture	-225000	(246000-21000)
Sale of Investments	20000
Interest received on investments	14000	(200000*10/100)

Net Cash used in Investing Activities	-206000

Note :

Note :

1) There is no cashflow impact due to Plant and Machinery

2) When Goodwill is reducing then it means it is amortised

and not sold unless otherwise specified

▶ Video Solution: Coming Soon

Question 27

Plant and Machinery A/c
Particulars	Amount	Particulars	Amount
To Balance B/d	850000	By Balance C/d	1000000
		By Depreciation A/c	50000
To Bank A/c	260000	By Bank A/c (Machinery)	40000
(New Purchases)		By Loss on Sale	20000
		(Machinery)
Total	1110000		1110000

Investment
Particulars	Amount	Particulars	Amount
To Balance B/d	40000	By Balance C/d	100000
To Bank A/c	60000	By Bank A/c	0
(New Purchases)

Total	100000		100000

Land
Particulars	Amount	Particulars	Amount
To Balance B/d	200000	By Balance C/d	100000
To Gain on Sale	60000	By Bank A/c	160000
		(Bal Figure), Sale of Land)

Total	260000		260000

Cash Flow from Investing Activities				Amount
Purchase of Plant and Machinery				-260000
Sale of Plant and Machinery				40000
Purchase of Investments				-60000
Sale of Land				160000

Net Cash used in Investing activities				-120000

▶ Video Solution: Coming Soon

Question 28

Cash Flow from Investing Activities				Amount
Machinery Purchased				-620000
Machinery Sold				200000
Investments Purchased				-240000
Investments Sold				80000
Interest received in Debentures				8000
Dividend Received on shares				20000
Purchase of Goodwill				-100000
Sale of Patents				150000
Rent Received on Plot of Land				50000

Net Cash used in Investing Activities				-452000

Note :

Interest paid on debentures is a financing activity

Dividend paid on equity shares is a financing activity

▶ Video Solution: Coming Soon

Question 29

Plant and Machinery A/c
Particulars	Amount	Particulars	Amount
To Balance B/d	2550000	By Balance C/d	3175000
		By Depreciation A/c	350000
		(for the year)
To Equity Shares	75000
(New Purchases)

To Bank A/c	1100000	By Bank A/c	125000
(New Purchases)		(Machinery Sold)
		By Loss on Sale	75000
		(Machinery)
Total	3725000		3725000

Note :

Sale value of machinery

Cost		350000
Less - Acc Dep		150000

WDV/BV		200000
Less - Sale Value		125000

Loss on Sale		75000

Note :

Machinery purchased by shares issue will not come in cash flow

Cash flow from Operating Activities

Add/Less	Description	Amount
	Net profit
Add	Provision for Tax
	NP before tax and E/O items	250000

Add	Non Cash Expenses
	Depreciation for the year	350000
	Loss on sale of machinery	75000
	OP before W/C changes	675000

Cash Flow from Investing Activities				Amount
Machinery Purchased				-1100000
Machinery Sold				125000

Net Cash used in Investing Activities				-975000

▶ Video Solution: Coming Soon

Question 30

Patents
Particulars	Amount	Particulars	Amount
To Balance B/d	100000	By Balance C/d	70000
To Profit on Sale	10000	By Amortization	20000
		By Bank A/c	20000
		(Bal Figure, Patents)

Total	110000		110000

Plant and Machinery
Particulars	Amount	Particulars	Amount
To Balance B/d	600000	By Balance C/d	750000
		By Bank A/c (Sale)	35000
To Bank A/c	270000	By Loss on Sale	15000
(Bal Figure)		By Depreciation	70000
		(During the year)
Total	870000		870000

Investments A/c
Particulars	Amount	Particulars	Amount
To Balance B/d	50000	By Balance C/d	80000
To Bank A/c (Purchase)	100000	By Bank A/c	80000
		(Sale of Investment)
To Gain on Sale	10000	(Bal Figure)


Total	160000		160000

Cash Flow from Investing Activities				Amount
Rent received on commercial Land				20000
Dividend from Damodar Ltd				18000
(150000*12/100)
Interest received on Investments				6000
(50000*12/100)
Sale of Investments				80000
Sale of Machinery				35000
Sale of Patents				20000

Purchase of Investments				-100000
Purchase of Machinery				-270000
Purcahse of Goodwill				-50000

Net Cash used in Investing Activities				-241000

Note :

Gain/Loss on sale of machinery

Cost of Machinery				80000
Less - Depreciation				30000

Written Down Value				50000
Less - Sale value				35000

Loss on Sale of machinery				15000

No Impact on cash flow due to Investments in Land and shares in Damodar Ltd

Interest on investments will be calculated on the opening balance

▶ Video Solution: Coming Soon

Q 1-10 | Q 11-20 | Q 21-30 | Q 31-40 | Q 41-52

T S Grewal Solutions – Cash Flow Statements – All Questions

T S Grewal Solutions Class 12 2026-27 – All Chapters

Interest received on investments

10% Investments

Total Interest (200000*10/100)

Less - Accrued Interest

Interest Received