Question 2: On 01.10.2016, X purchased 5 Machines from Y for ₹ 10,00,000. Payment was to be made—20% down and the balance in ...( DU SOL Financial Accounting Exam)

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Question 2: On 01.10.2016, X purchased 5 Machines from Y for ₹ 10,00,000. Payment was to be made—20% down and the balance in 

four annual equal instalments of ₹ 2,50,000 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 ₹ 6,000 on repairs of these machines and sold one of 

such machines for ₹ 70,000 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/1P4eIym2tfgsUvVcLgRKeDmnmwxWBlAVK/view?usp=drivesdk



2nd PART B

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