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A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.?
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A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 ...
Account of Hire Purchase in the Books of A
Date | Particulars | Amount (Rs.) | Cash Price (Rs.) | Interest Price (Rs.)
--- | --- | --- | --- | ---
Jan 1, 20X1 | Machinery A/c Dr. | 2,100 | 400 | 1,700
| To Hire Purchase A/c | 2,310 | 400 | 1,910
Dec 31, 20X1 | Hire Purchase A/c Dr. | 1,910 | - | 191
| To Interest on HP A/c | 191 | - | 191
Dec 31, 20X2 | Hire Purchase A/c Dr. | 760 | - | 76
| To Interest on HP A/c | 76 | - | 76
Dec 31, 20X3 | Hire Purchase A/c Dr. | 600 | - | 60
| To Interest on HP A/c | 60 | - | 60
Dec 31, 20X4 | Hire Purchase A/c Dr. | 550 | - | 55
| To Interest on HP A/c | 55 | - | 55
Calculation of Cash Price and Interest Price
Year | Cash Price (Rs.) | Interest Price (Rs.) | Total (Rs.)
--- | --- | --- | ---
1 | 400 | 191 | 591
2 | 760 | 76 | 836
3 | 600 | 60 | 660
4 | 550 | 55 | 605
Total | 2,310 | 382 | 2,692
Explanation
Hire purchase is a method of purchasing goods on credit, where the buyer pays a down payment and the remaining amount is paid in installments over a period of time. In this case, A delivers machinery to the buyer on January 1, 20X1, for a total price of Rs. 2,310, which includes interest at 10% on the unpaid balance.
The buyer makes a down payment of Rs. 400 at the time of delivery and agrees to pay the remaining amount in three annual installments of Rs. 760, Rs. 600, and Rs. 550, respectively. The interest on the unpaid balance is calculated and added to each installment.
In the books of A, the Machinery A/c is debited for the total price of Rs. 2,100, and the Hire Purchase A/c is credited for the same amount. The Hire Purchase A/c is then debited for the interest on the unpaid balance at the end of each year, and the Interest on HP A/c is credited for the same amount.
The cash price and interest price for each year are calculated separately. The cash price is the amount paid by the buyer in cash, and the interest price is the interest charged on the unpaid balance. The total amount paid by the buyer, including the down payment and installments, is Rs. 2,692, which is higher than the cash price of Rs. 2,310 due to the interest charged on the unpaid balance.
Date | Particulars | Amount (Rs.) | Cash Price (Rs.) | Interest Price (Rs.)
--- | --- | --- | --- | ---
Jan 1, 20X1 | Machinery A/c Dr. | 2,100 | 400 | 1,700
| To Hire Purchase A/c | 2,310 | 400 | 1,910
Dec 31, 20X1 | Hire Purchase A/c Dr. | 1,910 | - | 191
| To Interest on HP A/c | 191 | - | 191
Dec 31, 20X2 | Hire Purchase A/c Dr. | 760 | - | 76
| To Interest on HP A/c | 76 | - | 76
Dec 31, 20X3 | Hire Purchase A/c Dr. | 600 | - | 60
| To Interest on HP A/c | 60 | - | 60
Dec 31, 20X4 | Hire Purchase A/c Dr. | 550 | - | 55
| To Interest on HP A/c | 55 | - | 55
Calculation of Cash Price and Interest Price
Year | Cash Price (Rs.) | Interest Price (Rs.) | Total (Rs.)
--- | --- | --- | ---
1 | 400 | 191 | 591
2 | 760 | 76 | 836
3 | 600 | 60 | 660
4 | 550 | 55 | 605
Total | 2,310 | 382 | 2,692
Explanation
Hire purchase is a method of purchasing goods on credit, where the buyer pays a down payment and the remaining amount is paid in installments over a period of time. In this case, A delivers machinery to the buyer on January 1, 20X1, for a total price of Rs. 2,310, which includes interest at 10% on the unpaid balance.
The buyer makes a down payment of Rs. 400 at the time of delivery and agrees to pay the remaining amount in three annual installments of Rs. 760, Rs. 600, and Rs. 550, respectively. The interest on the unpaid balance is calculated and added to each installment.
In the books of A, the Machinery A/c is debited for the total price of Rs. 2,100, and the Hire Purchase A/c is credited for the same amount. The Hire Purchase A/c is then debited for the interest on the unpaid balance at the end of each year, and the Interest on HP A/c is credited for the same amount.
The cash price and interest price for each year are calculated separately. The cash price is the amount paid by the buyer in cash, and the interest price is the interest charged on the unpaid balance. The total amount paid by the buyer, including the down payment and installments, is Rs. 2,692, which is higher than the cash price of Rs. 2,310 due to the interest charged on the unpaid balance.
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A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 ...
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A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.?
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A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.?.
A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.?.
Solutions for A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? in English & in Hindi are available as part of our courses for B Com.
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Here you can find the meaning of A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? defined & explained in the simplest way possible. Besides giving the explanation of
A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.?, a detailed solution for A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? has been provided alongside types of A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? theory, EduRev gives you an
ample number of questions to practice A delivers on 1st January machinery ON HIER PURCHASE system for 2,310 (including interest at 10% on unpaid balance) to be received as follows :Rs 400 on delivery, 760 at the end of the first year , Rs 600 at the end of the second year and, 550 at the end of the third year. The year ending is 31st December. Draft in the book of A the account of hier purchase. Work out cash prize and interest prize for each year.? tests, examples and also practice B Com tests.
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