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X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x?
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X purchased a machine on hire purchase system the total cash price of ...
‘X’ purchased a machine on hire purchased system. The totalcash price of the machine is `31,960. Down payment `8,000and three installments of `12,000, `10,000, `4,000 payable atthe end of the first, second and third years respectively.Interest is charged 5% p.a. Charge depreciation at 10% onstraight line method. Prepare ledger accounts in the books of‘X
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X purchased a machine on hire purchase system the total cash price of ...
Ledger Accounts for Hire Purchase System
Introduction:
In the hire purchase system, goods are sold on credit, and the buyer has to pay the amount in installments. The seller retains the ownership of the goods until the final payment is made.
In this question, we are required to prepare ledger accounts in the books of X for the purchase of a machine on hire purchase system.
Ledger Accounts:
The ledger accounts required for this transaction are:
1. Machinery Account
2. Hire Purchase Account
3. Interest Account
4. Depreciation Account
1. Machinery Account:
The machinery account will record the cost of the machine and the depreciation charged on it. The ledger account will be as follows:
Machinery Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
2. Hire Purchase Account:
The hire purchase account will record the down payment and the installments paid by X. The ledger account will be as follows:
Hire Purchase Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
3. Interest Account:
The interest account will record the interest charged on the unpaid installments. The ledger account will be as follows:
Interest Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
4. Depreciation Account:
The depreciation account will record the depreciation charged on the machine. The ledger account will be as follows:
Depreciation Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
Explanation:
To prepare the above ledger accounts, we need to follow the steps given below:
1. Record the cost of the machine in the machinery account.
2. Calculate the depreciation charged on the machine using the straight-line method and record it in the machinery account.
3. Record the down payment made by X in the hire purchase account.
4. Record the installments paid by X in the hire purchase account.
5. Calculate the interest charged on the unpaid installments using the formula (outstanding amount x rate of interest x time) and record it in the interest account.
6. Calculate the depreciation charged on the machine using the straight-line method and record it in the depreciation account.
Conclusion:
The above ledger accounts will provide a clear picture of the transactions related to the purchase of a machine on hire purchase system in the books of X.
Introduction:
In the hire purchase system, goods are sold on credit, and the buyer has to pay the amount in installments. The seller retains the ownership of the goods until the final payment is made.
In this question, we are required to prepare ledger accounts in the books of X for the purchase of a machine on hire purchase system.
Ledger Accounts:
The ledger accounts required for this transaction are:
1. Machinery Account
2. Hire Purchase Account
3. Interest Account
4. Depreciation Account
1. Machinery Account:
The machinery account will record the cost of the machine and the depreciation charged on it. The ledger account will be as follows:
Machinery Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
2. Hire Purchase Account:
The hire purchase account will record the down payment and the installments paid by X. The ledger account will be as follows:
Hire Purchase Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
3. Interest Account:
The interest account will record the interest charged on the unpaid installments. The ledger account will be as follows:
Interest Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
4. Depreciation Account:
The depreciation account will record the depreciation charged on the machine. The ledger account will be as follows:
Depreciation Account
Date | Particulars | Debit | Credit
---- | ---------- | -----| ------
| | |
| | |
| | |
Explanation:
To prepare the above ledger accounts, we need to follow the steps given below:
1. Record the cost of the machine in the machinery account.
2. Calculate the depreciation charged on the machine using the straight-line method and record it in the machinery account.
3. Record the down payment made by X in the hire purchase account.
4. Record the installments paid by X in the hire purchase account.
5. Calculate the interest charged on the unpaid installments using the formula (outstanding amount x rate of interest x time) and record it in the interest account.
6. Calculate the depreciation charged on the machine using the straight-line method and record it in the depreciation account.
Conclusion:
The above ledger accounts will provide a clear picture of the transactions related to the purchase of a machine on hire purchase system in the books of X.
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X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x?
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X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? 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 X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x?.
X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? 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 X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x?.
Solutions for X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? in English & in Hindi are available as part of our courses for B Com.
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X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x?, a detailed solution for X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? has been provided alongside types of X purchased a machine on hire purchase system the total cash price of the machine is 31960 down payment 8000 and three installment of 12000,10000,4000 payable at the end of the first second and third year's respectively interest is charged 5% charge depreciation at 10% on straight line method prepare ledger accounts in the books of x? theory, EduRev gives you an
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