Basics Of Accounting

• Cash Equivalents (A) are short-term, highly liquid investments. Marketable securities are considered a type of cash equivalent because they can quickly be converted to cash (Hence, A-III).
• Financing Activities (B) involve transactions that result in changes in the size and composition of the equity capital and borrowings. Dividend received on Shares held as investment is related to financing as it affects the equity and return on investment (Hence, B-IV).
• Operating Activities (C) involve the principal revenue-generating activities of the enterprise. Expenses for Selling & Distribution align with operating activities as they relate to the core business processes (Hence, C-II).
• Investing Activities (D) relate to the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Interim Dividend paid corresponds to investing activities as it typically affects the cash outflow related to investments (Hence, D-I).

To solve the problem, we need to find the new value of the machinery after accounting for the 10% undervaluation.

1. Understanding the undervaluation:
The machinery is originally worth ₹75,000 but was undervalued by 10%, which means the recorded value is 10% less than the actual worth.

2. Calculating the undervaluation amount:
Undervaluation amount = 10% of ₹75,000
=

3. Calculating the new value in the Balance Sheet:
Since the machinery was undervalued by ₹7,500, the correct value should be:
New value = Original value + Undervaluation amount
= ₹75,000 + ₹7,500 = ₹82,500

Final Answer:
The new value of the machinery in the Balance Sheet will be ₹82,500.