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Raja purchased an asset under hire purchase system for ` 60,000 payments to be made ` 15,000 down and three installments of ` 18,000 each at the end of each year. Rate of interest is 10% p.a. Raja depreciates asset @ 10% p.a. on diminishing balance method. Due to financial difficulties Raja could not pay any installment after first installment and selling company took possession of the asset. The selling company after spending` 1,500 on repairs it sold away the asset for ` 38,000. ?
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Raja purchased an asset under hire purchase system for ` 60,000 paymen...
Calculation of Total Cost:

  • Cost of asset: ` 60,000

  • Down payment: ` 15,000

  • Three installments of ` 18,000 each: ` 54,000

  • Total cost: ` 1,29,000



Calculation of Interest:

  • Interest rate: 10% p.a.

  • Interest for the first year: ` 4,500 (10% of ` 45,000)

  • Interest for the second year: ` 3,150 (10% of ` 31,500)

  • Interest for the third year: ` 2,205 (10% of ` 22,050)

  • Total interest: ` 9,855



Calculation of Depreciation:

  • Depreciation rate: 10% p.a.

  • Depreciation for the first year: ` 4,500 (10% of ` 45,000)

  • Depreciation for the second year: ` 4,050 (10% of ` 40,500)

  • Depreciation for the third year: ` 3,645 (10% of ` 36,450)

  • Total depreciation: ` 12,195



Calculation of Outstanding Amount:

  • Amount paid: ` 15,000

  • Amount due after first installment: ` 1,08,855 (` 1,29,000 - ` 15,000 - ` 9,855 - ` 12,195)



Action taken by Selling Company:

  • Due to non-payment of installments, the selling company took possession of the asset.

  • The selling company spent ` 1,500 on repairs.

  • The selling company sold the asset for ` 38,000.



Conclusion:

  • The total cost of the asset was ` 1,29,000.

  • The total interest paid was ` 9,855.

  • The total depreciation was ` 12,195.

  • The outstanding amount after the first installment was ` 1,08,855.

  • The selling company took possession of the asset and sold it for ` 38,000 after spending ` 1,500 on repairs.

  • Raja suffered a loss of ` 70,355 (` 1,08,855 - ` 38,000 - ` 1,500).

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Raja purchased an asset under hire purchase system for ` 60,000 payments to be made ` 15,000 down and three installments of ` 18,000 each at the end of each year. Rate of interest is 10% p.a. Raja depreciates asset @ 10% p.a. on diminishing balance method. Due to financial difficulties Raja could not pay any installment after first installment and selling company took possession of the asset. The selling company after spending` 1,500 on repairs it sold away the asset for ` 38,000. ?
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Raja purchased an asset under hire purchase system for ` 60,000 payments to be made ` 15,000 down and three installments of ` 18,000 each at the end of each year. Rate of interest is 10% p.a. Raja depreciates asset @ 10% p.a. on diminishing balance method. Due to financial difficulties Raja could not pay any installment after first installment and selling company took possession of the asset. The selling company after spending` 1,500 on repairs it sold away the asset for ` 38,000. ? 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 Raja purchased an asset under hire purchase system for ` 60,000 payments to be made ` 15,000 down and three installments of ` 18,000 each at the end of each year. Rate of interest is 10% p.a. Raja depreciates asset @ 10% p.a. on diminishing balance method. Due to financial difficulties Raja could not pay any installment after first installment and selling company took possession of the asset. The selling company after spending` 1,500 on repairs it sold away the asset for ` 38,000. ? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Raja purchased an asset under hire purchase system for ` 60,000 payments to be made ` 15,000 down and three installments of ` 18,000 each at the end of each year. Rate of interest is 10% p.a. Raja depreciates asset @ 10% p.a. on diminishing balance method. Due to financial difficulties Raja could not pay any installment after first installment and selling company took possession of the asset. The selling company after spending` 1,500 on repairs it sold away the asset for ` 38,000. ?.
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