On 1 January, 2010, Ahafoman Contractors (AC) bought an Heavy Duty Crane machine from Tractor and EquipmentCompany (TEC) on Hire Purchase. The terms of the agreement were that an initial deposit of GHS200,000 was payable , followed by three installments of GHS189,890 on 31 December in each of the years from 2010 onwards.. TEC sells the machine for cash at GHS600,000. AC depreciates cranes at the rate of 25% on cost (assuming a nil residual value) The accounting years for both TEC and AC end on 31 December. Required b) Apportion the Hire Purchase Interest over the relevant years using the Sum of the digits method

On 1 January, 2010, Ahafoman Contractors (AC) bought an Heavy Duty Crane machine from Tractor and EquipmentCompany (TEC) on Hire Purchase. The terms of the agreement were that an initial deposit of GHS200,000 was payable , followed by three installments of GHS189,890 on 31 December in each of the years from 2010 onwards.. TEC sells the machine for cash at GHS600,000. AC depreciates cranes at the rate of 25% on cost (assuming a nil residual value) The accounting years for both TEC and AC end on 31 December. Required b) Apportion the Hire Purchase Interest over the relevant years using the Sum of the digits method

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 84TA

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