Commerce Exam > Commerce Questions > On 1.04.2014, X Ltd. purchased a Motor Car fr...
Start Learning for Free
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.?
Most Upvoted Answer
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Pur...
Introduction:
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, with a cash price of 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum.
Calculation of Instalments:
The total cost of the motor car is 24,000 + (3 x Instalment) + Interest. Thus, the second instalment is (24000 + Instalment) x 10/100 x 2 = 4800 + 0.1 Instalment. Therefore, the third instalment including interest is 35200 = 24000 + 4800 + 0.1 Instalment. Solving this equation gives us the value of Instalment as 6,000.
Depreciation:
Depreciation is to be provided @ 20% per annum on reducing balance method. Thus, the depreciation for the first year is 24,000 x 20% = 4,800. The written down value of the car at the end of the first year is 24,000 – 4,800 = 19,200. Similarly, the depreciation for the second year is 19,200 x 20% = 3,840. The written down value of the car at the end of the second year is 19,200 – 3,840 = 15,360. The depreciation for the third year is 15,360 x 20% = 3,072. The written down value of the car at the end of the third year is 15,360 – 3,072 = 12,288.
Sale of the Motor Car:
At the end of 3 years of services, the motor-car was sold for 60,000. The profit or loss on the sale of the car is calculated as follows:
Sales Proceeds = 60,000
Written down value of the car = 12,288
Profit on the sale of the car = Sales Proceeds – Written down value of the car = 47,712.
Conclusion:
In conclusion, X Ltd. purchased a motor car from Y Ltd. on hire purchase. The instalments were calculated, and depreciation was provided on a reducing balance basis at 20% per annum. At the end of three years, the car was sold for 60,000, resulting in a profit of 47,712.
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, with a cash price of 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum.
Calculation of Instalments:
The total cost of the motor car is 24,000 + (3 x Instalment) + Interest. Thus, the second instalment is (24000 + Instalment) x 10/100 x 2 = 4800 + 0.1 Instalment. Therefore, the third instalment including interest is 35200 = 24000 + 4800 + 0.1 Instalment. Solving this equation gives us the value of Instalment as 6,000.
Depreciation:
Depreciation is to be provided @ 20% per annum on reducing balance method. Thus, the depreciation for the first year is 24,000 x 20% = 4,800. The written down value of the car at the end of the first year is 24,000 – 4,800 = 19,200. Similarly, the depreciation for the second year is 19,200 x 20% = 3,840. The written down value of the car at the end of the second year is 19,200 – 3,840 = 15,360. The depreciation for the third year is 15,360 x 20% = 3,072. The written down value of the car at the end of the third year is 15,360 – 3,072 = 12,288.
Sale of the Motor Car:
At the end of 3 years of services, the motor-car was sold for 60,000. The profit or loss on the sale of the car is calculated as follows:
Sales Proceeds = 60,000
Written down value of the car = 12,288
Profit on the sale of the car = Sales Proceeds – Written down value of the car = 47,712.
Conclusion:
In conclusion, X Ltd. purchased a motor car from Y Ltd. on hire purchase. The instalments were calculated, and depreciation was provided on a reducing balance basis at 20% per annum. At the end of three years, the car was sold for 60,000, resulting in a profit of 47,712.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.?
Question Description
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.?.
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.?.
Solutions for On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? defined & explained in the simplest way possible. Besides giving the explanation of
On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.?, a detailed solution for On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? has been provided alongside types of On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? theory, EduRev gives you an
ample number of questions to practice On 1.04.2014, X Ltd. purchased a Motor Car from Y Ltd. on the Hire Purchase System, the Sze Cash Price of which was payable on 24,000 down and the balance in 3 equal annual instalments together with interest @ 10% per annum. The amount of 3rd instalment including interest was 35,200. Depreciation was to be provided @ 20% per annum on reducing balance method. At the end of 3 years of services the motor-car was sold for 60,000.? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce 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
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup