Question

Raja purchased an asset under hire purchase system for ` 60,000 payments to

be made ` 15,000 down and three installments of ` 18,000 each at the end of

each year. Rate of interest is 10% p.a. Raja depreciates asset @ 10% p.a. on

diminishing balance method.

Due to financial difficulties Raja could not pay any installment after first

installment and selling company took possession of the asset. The selling

company after spending` 1,500 on repairs it sold away the asset for ` 38,000.

Prepare necessary ledger accounts in the books of both the panties​

Answer 1

Answer:

Explanation:

Statement of Depreciation

Year Opening Balance Amount of depreciation Closing Balance

1                 60,000                        6,000                      54,000

2                 54,000                       5,400                       48,600

3                 48,600                        4,860                        43,740