Question

2.Mrs. Kirana buys a motor car on 1.4.2006 under hire purchase system, the terms of payments are as follows:

2,000 to be paid on signing the agreement, 2,800 at the end of the 1st year, 2600 at the end of the 2nd year, 2,400 at the end of 3rd year and 2,200 at the end of the 4th year. If the interest is charged at the rate of 10% p.a. What was the cash price of the Motor car? And also show the necessary ledger accounts under Asset accrual Method if the rate of depreciation is at 20% p.a on reducing balance meth

Answer 1

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