Question
Plant purchased for ₹6,00,000. Depreciation for year =
₹1,00,000. Closing balance of Plant = ₹10,00,000. Opening balance was ₹5,00,000. Calculate Cash outflow for plant purchase.Solution
Closing = Opening + Purchases – Depreciation = 5,00,000 + Purchases – 1,00,000 = 10,00,000 → Purchases = 6,00,000.
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