Answers Hire Purchase

8/3/2019 Answers Hire Purchase

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ACCOUNTIN G UNIT -1 SPECIAL ACCOUNT ING TRANSACTIONS AND SYSTEMS - I

comp i led by CA . Ramesh Bhandari 98788124 53, (0172) 5193314, 2270053

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Topi c 6 Hi re Purchase and Instalment Payment systemsA nswers

Q1. Situation no.2 for interest computation. Interests (Nil, 2725, 1861.25,

913.75)

Q2.Situation no. 3 for interest computation

Method 1 Interest (Nil, 400, 200, 100)

Method 2 Interest (Nil, 420, 210, 70)

Q3. Situation no. 4 (WORKBACK Method)

TOTAL CASH PRICE Rs. 54868.52

Total interest Rs. 9131.48

Q4. Situation no. 3 for interest computation

Method 1 Interest (24000, 18000, 12000, 6000)

Method 2 Interest (26250, 18750, 11250, 3750)

Q5. Total cash price Rs. 150000; total interest Rs. 50000; H.P Price Rs. 200000

Q6. Situation no. 4 (WORKBACK Method)

TOTAL CASH PRICE Rs. 25976.87

Total interest Rs. 4023.13

Q7. Interest (2236, 155.6, 844.4)

Assumed depreciation till date of repossession but interest till date of default

Loss on repossession Rs. 7822.64

Balance in Hire vendor Rs. 17155.6 transferred to asset account

Q8.Total cash price 300000. Interest (Nil, 33750, 22500, 11250)

Value of goods repossessed Rs. 43200

Book value of asset not repossessed Rs. 42187.50

Loss on repossession Rs. 41175

Balance of Hire vendor account Rs. 43050

Q9. Purchaser books Loss on repossession Rs. 5113.75

Vendor Books Profit on sale of repossessed goods 1957.50


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Q10. Total cash price 100000. Interest (Nil, 750, 5250, 2250)


Book value of asset not repossessed Rs. 20480


Balance of Hire vendor account Rs. 9420

Q11. 1433.33 profit

Q12. 103000

Q13. 86000

Q14. 2666.67 profit

Q15. 50900

Q16. (IN ALL DETAILS TO BE DONE IN CLASS)

Q17. Rs. 31166.67

Q18. 23250

Q19. Statement showing cash value of the machine acquired on hire-purchase basis

InstalmentAmount

Interest @ 5% halfyearly (10% p.a.) =5/105 = 1/21)

(in each instalment)

Principal Amount(in eachinstalment)

Rs. Rs. Rs.

5th Instalment 6,000 286 5,714

Less: Interest 286

5,714

Add: 4th Instalment 6,000

11,714 558 5,442

Less: Interest 558 (11,1565,714)

11,156

Add: 3rd instalment 6,000


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17,156 817 5,183

Less: Interest 817 (16,33911,156)

16,339

Add: 2nd instalment 6,000

22,339 1,063 4,937

Less: Interest 1,063 (21,27616,339)

21,276

Add: 1st instalment 6,000

27,276 1,299 4,701

Less: Interest 1,299 (25,97721,276)

25,977 4,023 25,977

The cash purchase price of machinery is Rs. 25,977.

Q20. Balance Sheet of Gopinath & Co. as at 31st December, 2006Liabilities Rs. Assets Rs.

FM & Co. Ltd. 40,000 Pick-up Van 90,000

Balance Sheet of Gopinath & Co. as at 31st December, 2007

Liabilities Rs. Assets Rs.


Balance Sheet of Gopinath & Co. as at 31st December, 2008

Liabilities Rs. Assets Rs.


Q21. If interest is ignored then Rs.450; otherwise Rs (1000*144/210) i.e. 685

Q22. Cash Price Rs. 300000 Depreciation Year 1- 90000, year 2 -63000, Year 3 -

44100

Q23.Rs. 150004 (Misprint of date even in module in question.year ofpurchase to be same as date of start of instalments)

Q24.Year 1 - 861, Year 2 - 369

Q25. 8600


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Q26. Year 1 - 126, Year 2- 78, Year 3 - 30

Q27. Rs. 550000

Q28. Rs. 200000 Cash price

Q29. Cash Price Rs. 15533 (WORKBACK Method)Loss on repossession Rs. 624

Q30. . Total cash price 225000 Interest (Nil, 16200, 10800, nil)




Balance of Hire vendor account Rs. 57300 (Settled by payment)

Q31. Total cash price 150000. Interest (Nil, 10800, 7200, 3438)




Balance of Hire vendor account Rs. 41638 (Settled by payment)

Q32.

(a) Tractors on hire purchase closing balance Rs. 14000

(b) Provision for depreciation of tractors closing balance Rs. 3050

(c) Disposal of tractors. Loss on sale Rs. 1150

(d) Hire purchase company closing balance Rs. 1500 resulting in Rs. 200 profiton settlement of one tractor.

Q33. Books of ABC Asso ciates

Flexible Leasing Limit ed Account

Dr.

Rs.

Cr.

Rs.

1996 1996

March 25 To Lease rental

A/c

72,000 March 25 By Car on Hire

Purchase A/c

2,00,000

March 31 To Bank 53,400 March 25 By Interest 1,60,000


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Suspense A/c

March 31 To Balance c/d 2,40,000 By Interest A/c 5,400

3,65,400 3,65,400

Interest Suspense Acco unt

Dr.

Rs.

Cr.

Rs.

1996 1996

March 25 To FlexibleLeasing Ltd. A/c

1,60,000 March, 31 By Interest on Hire

purchase A/c

72,727

March, 31 By Balance c/d 87,273

1,60,000 1,60,000

Working Notes :

(i ) Calculat ion of balance payable on 31st March, 1996 and th e Amoun t of Interest

Calculation of Difference Payable on 31.3.1996 and Interest

Date Quarterly Hire

Charges

(Rs.)

Quarterly Lease

Rentals Paid

(Rs.)

Difference

Payable

(Rs.)

Interest

From

(18% p.a.)

To

Amount ofInterest

(Rs.)

1.4.95 30,000 18,000 12,000 1.4.95 31.3.96 2,160

1.7.95 30,000 18,000 12,000 1.7.95 31.3.96 1,620

1.10.95 30,000 18,000 12,000 1.10.95 31.3.96 1,080

1.1.96 30,000 18,000 12,000 1.1.96 31.3.96 540

72,000 48,000 5,400

Amount payable on 31st March, 1996 :

Rs.

Balance due 48,000

Interest due 5,400

53,400

(1) Ascertainment of Total Amount of Interest on Hire Purchase

Rs.

Hire Purchase Price of the car

(Rs. 30,000 12 installments) 3,60,000

Less : Cash Price 2,00,000

Total Amount of Interest 1,60,000

(2) Calculation of Interest on Hire Purchase Attributable to the year 1995-1996.

Date Interest Calculation Interest

Rs.

1.4.95


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1.7.95

66

11000,60,1

26,667

1.10.95

66

10000,60,1

24,242

1.1.96

66

9000,60,1

21,818

72,727

Q34. Profit 201042

Q35 Rs. 7300

Q36. 165600 (Value of repossessed stock 21600)

Q37. Rs. 426000

Q38. 97028.57+ 3000 on repossessed items

Q39. Rs. 61500

Q40. 34125

Q41. 352000

Q42. Rs. 1400 profit

Q43. Rs. 1800000 profit

Q44. HP 225000; Trading 234000; Repossessed goods 1000; Profits before tax

300000; Profits after tax 195000

Q45. Rs. 499000


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Q46. 43300

Q47. Rs. 897500

Q48.210000 profit

Q49. Hire purchase profit 798000; Gross profit (Trading) 140000; Net profit

5,42,000

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Answers Hire Purchase