Bombay Roadways Ltd. purchased three trucks costing ~ 1,00,000 each from Hindusthan Auto Ltd. on 1st January, 2012 on the Hire Purchase System. The terms were : on delivery payment of ~ 25,000 for each truck and balance of the principal amount in 3 equal instalments plus interest at 15% per annum to be paid at the end of each year.

Bombay Roadways Ltd. writes-off 25% depreciation each year on the Diminishing Balance Method. Bombay Roadways Ltd. paid the instalments due on 31st December, 2012 and 31st December, 2013 but could not pay the final instalment.

Hindusthan Auto Ltd. repossessed two trucks adjusting values against the amount due. The repossession was done on 1st January, 2015 on the basis of 40% depreciation on the Diminishing Balance Method.

You are required to: (a) Write-up the ledger accounts in the books of Bombay Roadways Ltd. showing the above transactions upto 1.1.2015, and (b) Show the disclosure of the balances arising from the above transactions in the Balance Sheet of Bombay Roadways Ltd. as on 31st December, 2014.

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Lets solve the problem step by step 1 Ledger Accounts in the Books of Bombay Roadways Ltd a Ledger A... View the full answer