Practice Test - 01 UDESH REGULAR (GROUP-1) 12/03/2023

Total Marks -25

Accounting (Subjective)

1. M/s Super Enterprises bought 3 trucks from Kaya Ltd. on 01-04-2017 on the following terms:
Down Payment ₹ 6,50,000
3 Instalments to be paid, each at the end of each year
1st Instalment ₹ 3,55,000
2nd Instalment ₹ 3,38,000
3rd Instalment ₹ 3,30,000
Interest is charged @ 10 % p.a. and included in above instalments.
M/s Super Enterprises provides depreciation @ 20 % on the diminishing
balance of the Trucks

On 31st March, 2020, M/s Super Enterprises failed to pay the 3rd Instalment upon which Kaya Ltd. repossessed
1 truck. Kaya Ltd. agreed to leave 2 trucks with M/s Super Enterprises and adjusted the value of 1 truck against
the amount due.
The truck taken over was valued on the basis, of 30% depreciation annually on written down value basis. The
balance amount remaining in the Vendor's Account after the above adjustment was paid by M/s. Super
Enterprises after 3 months with interest @ 20 % p.a.
You are required to:
(i) Calculate the Cash Price of the trucks and the amount of Interest paid with each instalment.
(ii) Prepare Truck Account, Kaya Ltd.'s Account in the books of M/s Super Enterprises assuming that the books
of accounts are closed on 31st March every year.
(9 Marks)

2. On 1st April, 2017, Mr. Ramesh acquired a Tractor on Hire purchase from Ravi Ltd. The terms of contract were
as follows:
a. The Cash price of the Tractor was ₹ 11,50,000
b. 2,50,000 were to be paid as down payment on the date of purchase.
c. The Balance was to be paid in annual instalments of ₹ 3,00,000 plus interest at the end of the year.
d. Interest chargeable on the outstanding balance was 8% p.a.
e. Depreciation @ 10% p.a. is to be written off using straight line method.
Mr. Ramesh adopted the Interest Suspense method for recording his Hire purchase transactions.
You are required to: Prepare the Tractor account, Interest Suspense account and Ravi Ltd.s’ account in the books
of Mr. Ramesh.
(8 Marks)

3. State the differences between Hire Purchase Agreement & Instalment Purchase Agreement.
(4 Marks)
4. From the following, calculate the cash price of the asset:
Hire purchase price of the asset 50,000
Down payment 10,000
Four annual installments at the end of each year 10,000
Rate of interest 5% p.a. (4 Marks)

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