14) On 1 January 2014 X Ltd. purchased a motor car from Y Ltd. on hire purchase system, the cash price of which was payable as Rs. 12,000 down and the balance in 3 equal annual instalments together with interest @ 10% p.a. The amount of the last instalment including interest was Rs. 17,600. Depreciation is to be written off at 15% on written down balance method. At the end of the third year of service the motor car was sold for Rs. 31,000. Show the journal entries and prepare necessary ledger accounts in the books of both.

14) On 1 January 2014 X Ltd. purchased a motor car from Y Ltd. on hire purchase system, the cash price of which was payable as Rs. 12,000 down and the balance in 3 equal annual instalments together with interest @ 10% p.a. The amount of the last instalment including interest was Rs. 17,600. Depreciation is to be written off at 15% on written down balance method. At the end of the third year of service the motor car was sold for Rs. 31,000. Show the journal entries and prepare necessary ledger accounts in the books of both.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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