Markr Question 22 Srikumar bought 2 Cars from 'Fair Value Motors Pvt Ltd. on 1-4-2012 on...

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Markr Question 22 Srikumar bought 2 Cars from 'Fair Value Motors Pvt Ltd. on 1-4-2012 on the following terms: Down Payment 6,00,000 1st Installment at the end of first year 4,20,000 4,90,000 2nd Installment at the end of 2nd year 3rd Installment at the end of 3rd year Interest is charged at 10% p.a 5,50,000 Srikumar provides depreciation @ 25% on the diminishing balances. On 31-3-15 Srikumar failed to pay the 3rd installment upon which 'Fair Value Motors Pvt Ltd.' repossessed 1 car. Srikumar agreed to leave one car with Fair Value Motors Pvt Ltd. and adjusted the value of the car against the amount due. The car taken over was valued on the basis of 40% depreciation annually on written down basis. The balance amount remaining in the vendor's account after the above adjustment was paid by Srikumar after 3 months with interest @ 20% p.a. You are required to: (i) Calculate the cash price of the cars and the interest paid with each installment. (ii) Prepare Car Account and Fair Value Motors Pvt Ltd. Account in the books of Srikumar assuming books are closed on March 31, every year. Figures may be rounded off to the nearest rupee. (GM Markr Question 22 Srikumar bought 2 Cars from 'Fair Value Motors Pvt Ltd. on 1-4-2012 on the following terms: Down Payment 6,00,000 1st Installment at the end of first year 4,20,000 4,90,000 2nd Installment at the end of 2nd year 3rd Installment at the end of 3rd year Interest is charged at 10% p.a 5,50,000 Srikumar provides depreciation @ 25% on the diminishing balances. On 31-3-15 Srikumar failed to pay the 3rd installment upon which 'Fair Value Motors Pvt Ltd.' repossessed 1 car. Srikumar agreed to leave one car with Fair Value Motors Pvt Ltd. and adjusted the value of the car against the amount due. The car taken over was valued on the basis of 40% depreciation annually on written down basis. The balance amount remaining in the vendor's account after the above adjustment was paid by Srikumar after 3 months with interest @ 20% p.a. You are required to: (i) Calculate the cash price of the cars and the interest paid with each installment. (ii) Prepare Car Account and Fair Value Motors Pvt Ltd. Account in the books of Srikumar assuming books are closed on March 31, every year. Figures may be rounded off to the nearest rupee. (GM