Mr. Glostar commenced business on 1st April, 2014. He sells washing machines of a standard type and size on hire purchase terms. The total amount, including interest payable for each washing machine is $ 4,500. Customers are required to pay an initial deposit of $ 900, followed by eight quarterly instalments of $ 450 each. Following trial balance is extracted from Mr. Glostar's books as on 31-3- 2015: TRIAL BALANCE Debit Credit $ $ Particulars Capital |15,00,000 Furniture 1,50,000 Purchases 27,00,000 Cash Collected form Customers 11,47,500 Salaries and Wages 1,92,000 Office Expenses 82,500 Creditors 2,49,000 2,94,000 Bank Overdraft Bank Interest 6,000 Drawings 60,000 |31,90,500|31,90,500| 850 machines were sold during the year on hire purchase terms. Mr. Glostar has decided to take credit of profits and interest in proportion to cash collections. He purchases at a cost of $ 3,000 each. Provide 8% depreciation on furniture. You are required to prepare the Hire Purchase Trading A/c, Profit and Loss A/c and Balance Sheet as on that date. All workings are to be shown.

Mr. Glostar commenced business on 1st April, 2014. He sells washing machines of a standard type and size on hire purchase terms. The total amount, including interest payable for each washing machine is $ 4,500. Customers are required to pay an initial deposit of $ 900, followed by eight quarterly instalments of $ 450 each. Following trial balance is extracted from Mr. Glostar's books as on 31-3- 2015: TRIAL BALANCE Debit Credit $ $ Particulars Capital |15,00,000 Furniture 1,50,000 Purchases 27,00,000 Cash Collected form Customers 11,47,500 Salaries and Wages 1,92,000 Office Expenses 82,500 Creditors 2,49,000 2,94,000 Bank Overdraft Bank Interest 6,000 Drawings 60,000 |31,90,500|31,90,500| 850 machines were sold during the year on hire purchase terms. Mr. Glostar has decided to take credit of profits and interest in proportion to cash collections. He purchases at a cost of $ 3,000 each. Provide 8% depreciation on furniture. You are required to prepare the Hire Purchase Trading A/c, Profit and Loss A/c and Balance Sheet as on that date. All workings are to be shown.

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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