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B Com Question 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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B Com Question X purchased a machine on hire purchase system the total...
Ledger Accounts for Hire Purchase of a Machine

Introduction
X purchased a machine on hire purchase system, which means the machine was purchased on an installment basis. The total cash price of the machine is 31960, and the down payment was 8000. Three installments of 12000,10000,4000 payable at the end of the first, second, and third year's respectively. Interest is charged at 5%, and depreciation is charged at 10% on straight-line method.

Ledger Accounts

1. Machine Account
- The total cost of the machine is 31960, which includes the down payment and installments.
- Depreciation of the machine is charged at 10% on the straight-line method.
- The balance of the machine account will be the value of the machine after depreciation.

2. Hire Purchase Vendor Account
- The down payment of 8000 is credited to the Hire Purchase Vendor account.
- The installments of 12000, 10000, and 4000 are also credited to the Hire Purchase Vendor account.
- The interest charged at 5% is debited to the Hire Purchase Vendor account.

3. Interest on Hire Purchase Account
- The interest charged on the hire purchase is debited to the Interest on Hire Purchase account.
- The balance of the Interest on Hire Purchase account will be the total interest charged.

Conclusion
The ledger accounts for the hire purchase of a machine in the books of X include the Machine account, Hire Purchase Vendor account, and Interest on Hire Purchase account. The value of the machine after depreciation is recorded in the Machine account. The down payment and installments are credited to the Hire Purchase Vendor account, and the interest charged is debited to the same account. The Interest on Hire Purchase account records the total interest charged.
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B Com Question X purchased a machine on hire purchase system the total...
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B Com Question 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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B Com Question 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 B Com Question 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 B Com Question 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 B Com Question 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. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
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