Question

3. Arunangshu Transport Agency purchased 2 motor vans costing Rs. 80,000 each from
Debika Auto Company on 1st January 2015, on the hire purchase system. The terms of
payment was as follows:
Payment of Rs. 20,000 each for motor van on delivery. Reminder in three equal
instalments together with interest of 10% p.a to be paid at the end of each year.
Arunangshu Transport Agency writes-off 20% depreciation each year on the diminishing
balance method. The hire purchaser paid two instalments due on 31st December 2015
and 2016 but could not pay the final instalment.
Debika Auto company re-possessed one motor van adjusting its value against the due
amount. The re-possession was done on the basis of 25% depreciation on the fixed
instalment method.
Write up the Ledger accounts in the books of Arunangshu Transport Agency and show
your workings clearly.
Seema Agency urch​

Answer 1

Explanation:

accounts receivable and payable by cash or cheque for the right person to

Answer 2

Explanation:

there will be a loss of rs 20960