Question: Shri Ram Traders Ltd. purchased a machine from Johnson Traders Ltd. on hire purchase basis on given terms: a) cash price Rs. 12,00,000 b) Cash

Shri Ram Traders Ltd. purchased a machine from Johnson Traders Ltd. on hire purchase basis on given terms: a) cash price Rs. 12,00,000 b) Cash down Payment - 10% c) 4 equal installments of Rs. 3,00,000 each to be paid the end of each year.

You are required to compute payment of interest related to each accounting year presuming:

a) Sales were made at the beginning of the year?

b) Sales were made uniformly throughout the year?

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