Question

Hari a proprietor purchased a motor car for his personal use for Rs.2,00,000 and wants to show that as Capital expenditure in the business not as Drawings. Accountant refuse to do this. Who is correct? Identify a principal and explain in brief to justify your answer.

Answer 1

Answer:

(i) Calculation of Interest and Cash Price

No. of

ins.tallments

Outstanding

balance at

the end

after the

pa.yment of

in.stallment

Amount due

at the time of

in.stallment

Outstanding

balance at

the end

before the

payment of

ins.tallment

Interest Outstanding

balance at

the beginning

[1] [2] [3] [4] = 2 +3 [5] = 4 x 10/110 [6] = 4-5

3

rd - 1,65,000 1,65,000 15,000 1,50,000

2

nd 1,50,000 1,47,000 2,97,000 27,000 2,70,000

1

st 2,70,000 1,59,000 4,29,000 39,000 3,90,000

Down

payment

3,00,000

Total of interest and Total c.ash price 81,000 6,90,000

Explanation:

Hope it helps you