Question

Jalani Distributors sold three light commercial vans to Jain Enterprises on January 1, 2017

on hire purchase system. The price of each van was Rs. 90, 000 payment of which was to be

made as follows:

(i) Rs. 30, 000 as down payment for each van

(ii) Remaining amount in 3 equal installment along with interest @15%

Jain Enterprises were charging depreciation @ 20% each year on written down value

method. After payment of the first installment as on December 31, 2017, they could not pay

further installments. It was agreed between the parties for repossession of two van adjusting

their values against the amount due. For the purpose of repossession, depreciation @ 30%

p.a. was charged.

Repossessed goods were repaired at a cost Rs. 2,000 and were then sold for Rs. 92,000.

Calculate the value of repossessed stock and show the necessary accounts in the books of

both the parties.​

Answer 1

Answer:

Explanation:

Jalani Distributors sold three light commercial vans to Jain Enterprises on. January 1, 2017 on hire purchase system. The price of each van was Rs. 90,000 payment of which was to be made as follows :

i) Rs. 30,000 as a down payment for each van;

ii) The remaining amount in 3 annual equal instalments along with interest @ 15%.

Jain Enterprises were charging depreciation @20% each year on written down value’ method. After payment of the first instalment as on December 31, 2017, they could not pay further instalments. It was agreed between the parties for repossession of two vans adjusting their value against the amount due, For the purposes of repossession. Depreciation @ 30% p.a. was charged.

Repossessed goods were repaired at a cost of Rs. 2,000 and were then sold for 92,000. Calculate the value of repossessed stock and show the necessary accounts in the books of both the parties.