Question

LUIT
36. Arvind purchased a Motorcar from Babu Traders under the Instalment
Purchase System on 1-4-2010 and Rs. 2,60,000 was paid at the time of delivery.
The remaining amount was paid in the following instalments with interest at 10%
p.a. on outstanding cash price.
31-03-2011 Rs. 2,94,000 31-03-2013 Rs. 2,52,000
31-03-2012
31-03-2014 Rs. 2,31,000
Arvind is computing the depreciation every year at 15% p.a. under written
down value method. Accounts are closed on 31st March every year. Full cash price
is debited to motor car account at the time of purchase.
Following Journal Entry was found from his Books of Accounts on 31-3-2012:
Depreciation A/C
Dr. 1,40,250
To Motor Car A/C
1,40,250
You are required to prepare Motor Car A/c and Babu Traders A/c in the books
of Arvind.
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Answer 1

Answer:

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