HIRE-PURCHASE IMPORTANT QUESTIONS-with method are follow-FULL REPOSSESSION and PARTIAL REPOSSESSION

HIRE-PURCHASE IMPORTANT QUESTIONS

Question:1 A.ltd purchased a machine on hire purchases system from B, Ltd , on 1 january, 1998, paying immediately Rs, 20,000 and agreeing to pay three instalments of Rs, 20,000 each on 31 december every, year the cash price of the machine is Rs, 74,500 and vendors, charge interest at 5% p.a calculate the amount of interest paid by buyer to seller every, year

Question:2 On 1^st January, 2012 bharat steels Ltd, bough a machine on hire purchases system the.cash price of the machine was Rs, 22,350 and the payment was to be made Rs, 6,000 on signing the agreement and the balance in 3 instalments of Rs, 6,000 each , at the end of the year, the rate of interest charged by the vendor is 5% p.a the depreciation is calculated at 10% annually on the diminishing balance of the asset, make journal entries, in the books of bharat steels Ltd, and the vendor recording the transaction for three, year

Question:3 On 1 april, 2014, a transport company ordered a motor vehicle whose cash price was Rs, 3,50,000 the company entered into a hire purchases agreement to pay Rs, 100,000 immediately and eight quarterly instalments of Rs, 36,740 each, the first instalment being payable on 30 june , 2014  the rate of interest was 15% per annum, the company depreciated the motor vehicle  @10% per annum on the diminishing balance method, prepare the motor vehicle account in the books of the hire purchaser for the two years ended 31 march, 2016 assuming that on every payment the hire purchaser debited the motor vehicle account with that portion of the payment which was made towards cash price also, assume the account is closed on 31 march every year

Question:4

Aprna purchased a radio-recorder on 1, 19X1 on hire purchase system for Rs, 2,500

Payable as under:

Down payment                          Rs, 465

At, the end of first year             Rs, 713

At the end of second yaer          Rs, 902

Interest is charged at 5% p.a      Rs, 420

Calculate the total cash price of radio-recorder and interest paid with each instalment.

Question:5

(FULL REPOSSESSION)-X purchased a machine from y for Rs, 5,60,000 payment to be made Rs, 150,000 down and three instalments of Rs, 150,000 each at the end of each year , X depreciaties asset at 10% p.a on written down value method. Because of financial difficulties, X having paid down payment and first instalment at the end of first year, could not pay second instalment paid the seller take possession of the asset, prepare machine account and vendor’s account in the books, of X also give purchaser’s account in the books of Y

Question:6 Amarmani purchased a truck from tata motors Ltd, for Rs, 5,60,000 payment to be made. Rs, 150,000 down cash and three instalments of Rs, 150,000 each at the end of each year . rate of interest is charged at 5% p.a the buyer depreciates the truck at 10% p.a on written down value method. Because of financial difficulties the purchaser , having paid the down cash and the first instalment at the end of first year, could not pay the second instalment with the result tata motors, ltd, took procession of the truck, the vendor after spending Rs, 12,440 on repairs sold it for Rs, 4,25,000. Prepare the necessary accounts in the books of both the parties,

[loss on repossession-Rs, 1,59,075]

Question:7On 1 january , 2011 ashok acqurired a machinery on hire-purchase system from real aids ltd, agreeing to pay four annual instalments for Rs, 6,000 each payable at the end of each year, there is no down payment. Interest is charged @ 20% per annum and it included in the annual   instalments, because of financial difficulties , ashok after having paid the first and second instalments respectively could not pay the third, yearly instalment due on 31 december, 2013 where upon the vendor repossessed the machinery ashok provides depreciation on the machinery 10% p.a according to the written down value method. Show the machinery account and the accounts of real aids ltd, in the books of ashok , all : working should form part of your answer.

[loss on repossession-Rs, 324]

Question:8 (PARTIAL REPOSSESSION)- a company purchased 2 machines of Rs, 10,500 each on hire purchase system paying Rs, 6,000 down and remainder in 3 equal instalments of Rs, 5,000 each together with interest at 5%p.a the company writes off depreciation at 10% p.a according to diminishing balance method . the company could not pay the second instalment. The vendor left one machine with the company adjusting the value of the other against amount due taking the machine at 20% depreciation at diminishing balance method, prepare ledger accounts in the company, books,

[ loss on repossession-Rs, 1,785]

Question:9 Bombay okara corporation LTd, purchased on 1 january, 2017 from delhi motors, five trucks costing Rs, 50,000 each on the hire purchase system . the payment was to be made as follows:10% of cash price down 25% of cash price at the end of the four subsequent half year, the payment due on 31 december , 2017 could not be made and hence the trucks were seized by the vendor but, after negotiation , the hire purchaser was allowed to keep 3 trucks  on the condition that the value of the other 2 trucks would be adjusted against the amount due, the trucks being valued at cost less 25% depreciation , bombay okara corporation closes is book on 30 june each year and the depreciation is charged at 15% p.a on trucks on the original cost. The vendor spent Rs, 10,000 on getting the trucks thoroughly overhauled and sold them for Rs, 90,000. Show the various, account in the books of both the parties,

[ loss on repossession-Rs, 10,000]

Question:10 On 1-1-2016,a television dealer bought 5 television sets from dolphia television company on hire-purchase the cash price of each set was Rs, 20,000. It was agreed that Rs, 25,000 should be paid immediately and the balance in 3 instalments of Rs, 30,000 each at the end of each year, the television co. charges interest @ 10%p.a the buyer depreciates television sets at 20% p.a on the diminishing balance method. X paid cash down and 2 instalments but failed to pay the last instalment . consequently, the television co, repossessed three sets, leaving two sets with the buyer and adjusting the value of 3 sets against the amount due, the sets repossessed were valued on the basis of 30% depreciation p.a on the written down value the sets repossessed were sold by the television co, for Rs, 30,000 after necessary repairs amounting to Rs, 5,000. Open the necessary ledger account in the books of both the parties, :

[loss on repossession-Rs, 10,140]