X purchased seven trucks on hire-purchase on 1.7.2017. The cash purchase price of each truck was 50,000.

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X purchased seven trucks on hire-purchase on 1.7.2017. The cash purchase price of each truck was ₹50,000. He was to pay 20% of the cash purchase price at the time of delivery and the balance in five half-yearly instalments starting from 31.12.2017 with interest @ 5% p.a.

On X’s failure to pay the instalment due on 30.6.2018 it was agreed that X would return three trucks to the vendor and the remaining four would be retained by him. The vendor agreed to allow him a credit for the amount paid against these three trucks less 25%. Show the relevant accounts in the books of X assuming that his books are closed in June every year and depreciation @ 20% is charged on trucks.

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Related Book For  answer-question

Financial Accounting Volume II

ISBN: 9789387886230

4th Edition

Authors: Mohamed Hanif, Amitabha Mukherjee

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