HIRE PURCHASE

FIELD WORK

CIA-1 FINANCIAL ACCOUNTING

REPORTED FROM:
DC MOTORS-VESPA AND APRILLA DEALERS,
DASARAHALI

SUBMITTED BY:
ANCHAL KEDIA: 2210806
SHREYA G: 2210849
CRISTIN THANKACHAN: 2210815
K M NANDAKISHORE: 2210824
YUKTHA S. GOWDA: 2210857
ANCHAL SHIT: 2210863
INTRODUCTION:

Vespa is an Italian brand of scooter manufactured by Piaggio. The

name means wasp in Italian. The Vespa has evolved from a single
model motor scooter manufactured in 1946 by Piaggio & Co. S.p.A.
of Pontedera, Italy to a full line of scooters and one of seven
companies today owned by Piaggio.
From their inception, Vespa scooters have been known for their
painted, pressed steel unibody which combines, in a unified
structural unit, a complete cowling for the engine, a flat floorboard,
and a prominent front fairing.

ABOUT THE PRODUCT:

The Vespa product we chose was VESPA SXL 150cc.
The design and colors of the product are inspired by the roaring 60’s
and has iconic monocoque designs. The 3 Valve Fuel injection BSVI
Engines with the engine capacity of 150 cc. It has Anti-Lock Braking
System (ABS). Hydraulic Front & Rear suspensions, Anti-Dive
Character.
CASH PRICE – Rs. 1,92,500
Interest rate – 8%
Down payment – Rs. 45,000
Years – 4
Instalment- 36875/ per year

CALCULATION OF INTEREST

PARTICULARS AMOUNT
CASH PRICE 1,92,000
Less: DOWN PAYMENT (45,000)

BALANCE O/S 1,47,500

Less: 1st year instalment (36,875)

2nd year balance outstanding 1,10,625

Less : 2nd Year instalment (36,875)

3rd year balance outstanding 73,750

Less: 3rd year instalment (36,875)

4th year balance outstanding 36,875

Less: 4th year instalment (36,875)

BALANCE NIL
 PARTICULARS AMOUNT
1st year interest 11,800
(1,47,500 * 8/100)
2nd year interest 8,850
(1,10,000* 8/100)
3rd year interest 5,900
(73,750* 8/100)
4th year interest 295
(36,875* 8/100)
TOTAL INTEREST 26,845

PARTICULARS AMOUNT

1st year instalment 48,675

2nd year instalment 45,775

3rd year instalment 42,775

4th year instalment 37,170

HIRE PURCHASE PRICE 1,74,345

 LEDGER ACCOUNTS

IN THE BOOKS OF HIRE PURCHASER

VENDOR A/C

DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT

1st To bank a/c 45,000 1st By bike a/c 1,92,000
YEAR Year
To bank a/c 48,000 By Interest a/c 11,800
To balance c/d 1,10,000

2,04300 2,04,300

2nd To bank a/c 45,725 2nd By balance b/d 1,10,000

Year Year
To balance a/c 73,000 By Interest a/c 8,850

79,650 79,650

3rd To bank a/c 42,775 3rd By balance b/d 73,750

Year Year
To balance c/d 36,875 By Interest a/c 59,000

79,650 79,650

4th To bank a/c 37,170 4th By balance b/d 36,875

Year Year
By Interest a/c 295

37,170 37,170
 INTEREST A/C

Dr. Cr.

DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT

1st To vendor a/c 11,800 1st Year By profit and loss a/c 11,800
Year

11,800 11,800

2nd To vendor a/c 8,850 2nd By profit and loss a/c 8,850
Year Year

8,850 8,850

3rd To vendor a/c 5,400 3rd By profit and loss a/c 5,400
Year Year

5,400 5,400

4th To vendor a/c 295 4th year By profit and loss a/c 295
Year

295 295
 IN THE BOOKS OF VENDOR

PURCHASER A/C
Dr. Cr.

DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT

1st To sales a/c 1,92,000 1st By bank a/c 45,000
Year Year

To Interest a/c 11,800 By bank a/c 48,765

By balance c/d 1,10,675

2,04,300 2,04,300

2nd To balance b/d 1,10,675 2nd By bank a/c 45,725

Year Year

To Interest a/c 8,850 By balance c/d 73,750

1,19,475 1,19,475

3rd To balance b/d 73,750 3rd By bank a/c 42,775

Year Year

To Interest a/c 5,900 By balance c/d 36,875

79,650 79,650

4th To balance b/d 36,875 4th By bank 37,170

Year Year

To Interest a/c 295

37,170 37,170
 INTEREST A/C
Dr. cr.

DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT

1st To profit and loss a/c 11,800 1st By Vendors a/c 11,800
Year Year

11,800 11,800

2nd To profit and loss a/c 8,850 2nd By vendor’s a/c 8,850
Year Year

8,850 8,850

3rd To profit and loss a/c 5,900 3rd By vendor’s a/c 5,900
Year Year

5,900 5,900

4th To profit and loss a/c 250 4th By vendor’s a/c 250
Year Year

250 250
RESEARCH INSIDERS: