X Transport Ltd. purchased from Delhi Motors 3 Tempos costingRs. 50,000 each on the hire purchase system on 1-1-2004. Paymentwas to be made Rs. 30,000 down and the remainder in 3 equal annualinstalments payable on 31-12-2004, 31-12-2005 and 31-12-99 togetherwith interest @ 9%. X Transport Ltd. write off depreciation at therate of 20% on the diminishing balance. It paid the instalment dueat the end of the first year i.e. 31-12-2004 but could not pay thenext on 31-12-2005. Delhi Motors agreed to leave one Tempo with thepurchaser on 1-1-2006 adjusting the value of the other 2 Temposagainst the amount due on 31-12-2005. The Tempos were valued on thebasis of 30% depreciation annually. What will be the value of Tempoleft with buyer & taken away by seller at the end of 2ndYear.
X Transport Ltd. purchased from Delhi Motors 3 Tempos costingRs. 50,000 each on the hire purchase system on 1-1-2004. Paymentwas to be made Rs. 30,000 down and the remainder in 3 equal annualinstalments payable on 31-12-2004, 31-12-2005 and 31-12-99 togetherwith interest @ 9%. X Transport Ltd. write off depreciation at therate of 20% on the diminishing balance. It paid the instalment dueat the end of the first year i.e. 31-12-2004 but could not pay thenext on 31-12-2005. Delhi Motors agreed to leave one Tempo with thepurchaser on 1-1-2006 adjusting the value of the other 2 Temposagainst the amount due on 31-12-2005. The Tempos were valued on thebasis of 30% depreciation annually. What will be the value of Tempoleft with buyer & taken away by seller at the end of 2ndYear.
