B Com Exam > B Com Questions > A purchases a plant from B on instalment syst...
Start Learning for Free
A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.?
Most Upvoted Answer
A purchases a plant from B on instalment system on April 1 ,2013. It's...
Accounts of B for the Plant Sold on Installment to A
Calculation of Total Amount Payable by A
- Cash price of the plant: Rs. 50,000
- Amount paid immediately: Rs. 20,000
- Balance amount: Rs. 30,000
- Yearly installment: Rs. 10,000
- Number of installments: 3
- Total installment payable: Rs. 30,000
Calculation of Interest and Insurance Premium
- Interest rate charged by B: 10% p.a.
- Insurance premium charged by B: 2% p.a.
Calculation of Bad and Doubtful Debt Provision
- Provision made by B: 10% of the total installment payable
Journal Entries in the Books of B
1. On April 1, 2013, when A purchased the plant
- A/c Receivable Dr. Rs. 30,000
- Plant Sales A/c Cr. Rs. 30,000
2. On March 31, 2014, when the first installment was due
- A/c Receivable Dr. Rs. 10,000
- Interest Receivable A/c Dr. Rs. 1,000
- Insurance Receivable A/c Dr. Rs. 200
- Provision for Bad and Doubtful Debts A/c Dr. Rs. 1,100
- Plant Sales A/c Cr. Rs. 10,000
- Interest Income A/c Cr. Rs. 1,000
- Insurance Income A/c Cr. Rs. 200
3. On April 1, 2014, when the first installment was paid
- Cash/Bank A/c Dr. Rs. 11,300
- A/c Receivable Cr. Rs. 10,000
- Interest Income A/c Cr. Rs. 1,000
- Insurance Income A/c Cr. Rs. 200
- Provision for Bad and Doubtful Debts A/c Cr. Rs. 100
4. Similarly, journal entries will be made on March 31 and April 1 of 2015 and 2016 for the second and third installments.
Conclusion
Thus, the necessary accounts in the books of B for the plant sold on installment to A will include the calculation of total amount payable by A, interest and insurance premium, and bad and doubtful debt provision. Journal entries will be made in the books of B on March 31 and April 1 of each year for the installment due and paid by A.
Calculation of Total Amount Payable by A
- Cash price of the plant: Rs. 50,000
- Amount paid immediately: Rs. 20,000
- Balance amount: Rs. 30,000
- Yearly installment: Rs. 10,000
- Number of installments: 3
- Total installment payable: Rs. 30,000
Calculation of Interest and Insurance Premium
- Interest rate charged by B: 10% p.a.
- Insurance premium charged by B: 2% p.a.
Calculation of Bad and Doubtful Debt Provision
- Provision made by B: 10% of the total installment payable
Journal Entries in the Books of B
1. On April 1, 2013, when A purchased the plant
- A/c Receivable Dr. Rs. 30,000
- Plant Sales A/c Cr. Rs. 30,000
2. On March 31, 2014, when the first installment was due
- A/c Receivable Dr. Rs. 10,000
- Interest Receivable A/c Dr. Rs. 1,000
- Insurance Receivable A/c Dr. Rs. 200
- Provision for Bad and Doubtful Debts A/c Dr. Rs. 1,100
- Plant Sales A/c Cr. Rs. 10,000
- Interest Income A/c Cr. Rs. 1,000
- Insurance Income A/c Cr. Rs. 200
3. On April 1, 2014, when the first installment was paid
- Cash/Bank A/c Dr. Rs. 11,300
- A/c Receivable Cr. Rs. 10,000
- Interest Income A/c Cr. Rs. 1,000
- Insurance Income A/c Cr. Rs. 200
- Provision for Bad and Doubtful Debts A/c Cr. Rs. 100
4. Similarly, journal entries will be made on March 31 and April 1 of 2015 and 2016 for the second and third installments.
Conclusion
Thus, the necessary accounts in the books of B for the plant sold on installment to A will include the calculation of total amount payable by A, interest and insurance premium, and bad and doubtful debt provision. Journal entries will be made in the books of B on March 31 and April 1 of each year for the installment due and paid by A.
|
Explore Courses for B Com exam
|
|
Similar B Com Doubts
A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.?
Question Description
A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? 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 purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.?.
A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? 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 purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.?.
Solutions for A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? in English & in Hindi are available as part of our courses for B Com.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? defined & explained in the simplest way possible. Besides giving the explanation of
A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.?, a detailed solution for A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? has been provided alongside types of A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? theory, EduRev gives you an
ample number of questions to practice A purchases a plant from B on instalment system on April 1 ,2013. It's cash price is rs. 50,000. Rs.20000 were paid immediately. Balance of the amount was payable in three yearly instalments of rs. 10000 each. The instalment due on 31st March each year is paid on 1 April of the next year.B charges 10 % p.a. interest and insurance premium@2% p.a. in addition to the amount of instalment from A. B makes a provision of 10% for bad and doubtful debts . Prepare necessary accounts in the books of B.? tests, examples and also practice B Com tests.
|
|
Explore Courses for B Com exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup