A company has the following non-current asset transactions. Non-current assets were sold for £25,000. Non-current assets purchased cost £600,000, part of these costs (£50,000) are unpaid at the year end. Non-current assets with a value of £250,000 are also leased. Depreciation for the period is £85,000. Calculate the 'Investment' cash flow.

Question

Quizplus · Accepted Answer

The 'Investment' cash flow includes cash spent on purchasing non-current assets and proceeds from selling non-current assets. Purchases were £600,000, but £50,000 were unpaid, so actual cash spent is £550,000. Sales brought in £25,000. Therefore, the net cash flow is £550,000 - £25,000 = £525,000 outflow, represented as (£525,000). Leased assets and depreciation do not affect cash flow directly.

A Company Has the Following Non-Current Asset Transactions