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Q.

Balance Sheet (Extract)

Liabilities31.03.201931.03.2020
12% DebenturesRs.2,00,000/-Rs.1,60,000/-

Additional information:

Interest on debentures is paid on half yearly basis on 30th September and 31st March each year. Debentures were redeemed on 30th September, 2019. How much amount (related to above information) will be shown in Financing Activity for cash flow statement prepared on 31st March, 2020?

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a

Out flow – Rs.40,000/-

b

Out flow – Rs.64,000/-

c

Out flow – Rs.61,600/-

d

Out flow – Rs.42,600/-

answer is C.

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Detailed Solution

Cash flow from financing activities .

 

Redemption of  debentures = 40,000

Interest on debentures         = 21,600

                                              = 61,000         

 Interest on debentures =  

                                          = 19,200 +2,400

                                          = Rs.21,600/-.

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