Question: 3. On 01.7.2016, X purchased 5 Machines from Y for ₹ 20,00,000. Payment was to be made—20% down and the balance in four
annual equal instalments of ₹ 5,00,000 each to be paid at the end of each year.X, writes off depreciation @ 20% p.a. on the
original cost. On X ’s failure to pay the third instalment, Y e-mailed X that on 01.04.2020 he will repossess 3 machines and will
allow a credit for lower of the following:
(i) Value of Machines on the basis of 40% p.a.depreciation on WDV basis.
(ii) the amount paid against 3 machines less 50%.
X replied Ok. 01.04.2020 Y repossessed the machines as per mail. Y spent ₹ 12,000 on repairs of these machines and sold one of
such machines for ₹ 1,40,000 on 30th June 2020. X follows financial year as its accounting year.
Required: Prepare Machinery Account and Hire Vendor’s Account in the books of X and Hire Purchaser’s Account and Goods
Repossessed Account in the books of Y. Also Show the Items related to Hire Purchase in the Balance Sheet of X as at 31st
March, 2020.
Answer:
https://drive.google.com/file/d/1PN_ZkKXjgGxx2lhqgerdZvSUTIIQ3C5x/view?usp=drivesdk
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