Chapter 111

Presidency
College

NIRF – Top 100

Ranked College

Reaccredited by
NAAC with A+
Hire Purchase System
Presidency
Group
 On 1st April, 2013 Arjun bought a washing
Presidency machine from M/S Gruha on hire purchase basis.
College
The particulars are as follows:
1. Cash price Rs.25,000
NIRF – Top 100 2. Rs.5,000 to be paid on signing the contract
Ranked College
3. Balance in four instalments of Rs.5,000 plus
interest.
4. Interest charged on outstanding balance at
Reaccredited by
NAAC with A+
5%
5. Depreciation at 10% p.a on written down
Presidency
Group value method.
Draft necessary ledger accounts in the books
of hire purchaser.
 Calculation of interest
Presidency
College
• Cash price 25000
• (-) Down payment 5,000
20000
• (+) interest for the first year 1000
NIRF – Top 100 21000
Ranked College
• (-)1st installment paid( 5000 + 1000) 6,000
• 15000
• (+) interest for the 11nd year 750
15750
• (-)11nd installment paid ( 5000 + 750) 5.750
Reaccredited by • 10000
NAAC with A+ • (+) interest for the third year 500
10500
Presidency
(-) Third installment paid ( 5000 + 500) 5500
Group 5000
(+) interest for last year 250
5250
(-) last instalment paid(5000 + 250) 5250
Nil
 Calculation of cash portion
Presidency
College

• 1st year cash portion= 6,000 – 1000 = 5000

NIRF – Top 100 • 2nd year cash portion = 5750 – 750 = 5000
Ranked College

• 3rd year cash portion = 5500 –500 = 5000

• 4th year cash portion = 5250 – 250 = 5000
Reaccredited by
NAAC with A+

Presidency
Group
 Calculation of depreciation
Presidency
College
• Cash price 25000
• (-) 1st yr dep 2500
NIRF – Top 100
Ranked College
22500
(-) 2nd yr dep 2250
20250
Reaccredited by
NAAC with A+
(-) 3rd yr dep 2025
Presidency
Group
18225
(-)4th year dep 1823
16,402
 Washing Machine a/c

Presidency Date Particulars J Amount Date Particulars J Amount

College F F
1.4.13 To Bank 5000 31.3.14 By depreciation 2500
31.3.14 To m/s Gruha 5000 31.3.14 By balance c/d 7500
10000 10000
NIRF – Top 100 1.4.14 To balance b/d 7500 31.3.15 By depreciation 2250
Ranked College
31.3.15 To m/s Gruha 5000 31.3.15 By balance c/d 10250
12500 12500
1.4.15 To balance b/d 10250 31.3.16 By depreciation 2025
31.3.16 To m/s Gruha 5000 31.3.16 By balance c/d 13225
Reaccredited by 15250 15250
NAAC with A+
1.4.16 To balance b/d 13225 31.3.17 By depreciation 1823
31.3.17 To m/s Gruha 5000 31.3.17 By balance c/d 16402
18225 18225
Presidency
Group

1.4.17 To balance b/d 16402

 m/s Gruha a/c
Presidency
College
Date Particulars J Amount Date Particiuars J Amount
F F
31.3.14 To Bank a/c 6000 31.3.14 By w.machine a/c 5000
---------- 31.3.14 By interest a/c 1000
NIRF – Top 100
Ranked College 6000 6000
31.3.15 To Bank a/c 5750 31.3.15 By w.machine a/c 5000
--------- 31.3.15 By interest a/c 750
5750 5750
31.3.16 To Bank a/c 5500 31.3.16 By w.machine a/c 5000
Reaccredited by
---------- 31.3.16 By interest a/c 500
NAAC with A+ 5500 5500
31.3.17 To Bank a/c 5250 31.3.17 By w.machine a/c 5000
Presidency ---------- 31.3.17 By interest a/c 250
Group
5250 5250
 Interest a/c
Presidency
College
Date Particulars J Amount Date Particiuars J Amount
F F
31.3.14 To m/s Gruha 1000 31.3.14 By P/L a/c 1000
-------- -------
NIRF – Top 100
Ranked College
1000 1000
31.3.15 To m/s Gruha 750 31.3.15 By P/L a/c 750
-------- -------
750 750
31.3.16 To m/s Gruha 500 31.3.16 By P/L a/c 500
-------- ------
Reaccredited by 500 500
NAAC with A+

31.3.17 To m/s Gruha 250 31.3.17 By P/L a/c 250

Presidency
Group ----- ----
250 250
 Depreciation a/c
Presidency
College
Date Particulars J Amoun Date Particiuars J Amount
F t F

31.3.14 To w.machine a/c 2500 31.3.14 By P/L a/c 2500

NIRF – Top 100
-------- -------
Ranked College
2500 2500

31.3.15 To w.machine a/c 2250 31.3.15 By P/L a/c 2250

-------- -------
2250 2250
Reaccredited by
NAAC with A+ 31.3.16 To w.machine a/c 2025 31.3.16 By P/L a/c 2025
-------- ------
2025 2025
Presidency
Group
31.3.17 To w.machine a/c 1823 31.3.17 By P/L a/c 1823
-------- ------
1823 1823