Question The following transactions were derive... - SS3 Accounting Preparation of Hire Purchase Account And The Vendor’s Account Question
Question:
The following transactions were derived from the books of FUMI CO. for the month of August 2022. You are required to prepare in tabular form:
-
The hire purchase account
-
The vendor’s accounts
|
Date |
Transaction |
Instalment (₦) |
Interest (₦) |
Total (₦) |
Balance (₦) |
|
08/01/2022 |
Purchased goods |
0 |
0 |
150,000 |
150,000 |
|
08/05/2022 |
Received goods |
0 |
0 |
0 |
150,000 |
|
08/10/2022 |
Made a down payment |
0 |
0 |
30,000 |
120,000 |
|
08/15/2022 |
Paid instalment |
20,000 |
6,000 |
26,000 |
94,000 |
|
08/20/2022 |
Paid instalment |
20,000 |
4,700 |
24,700 |
69,300 |
|
08/25/2022 |
Received repair invoice and deducted from instalment payment |
(5,000) |
0 |
(5,000) |
64,300 |
|
08/28/2022 |
Made additional payment |
0 |
0 |
15,000 |
49,300 |
|
08/30/2022 |
Received installment |
20,000 |
2,958 |
22,958 |
26,342 |
|
08/31/2022 |
Received additional payment and closed the hire purchase account |
0 |
0 |
26,342 |
0 |
|
Total |
60,000 |
13,658 |
235,700 |
0 |
Note:
-
The purchase amount was ₦150,000, with a down payment of ₦30,000, leaving a balance of ₦120,000.
-
Instalments of ₦20,000 were paid on the 15th, 20th, and 30th of August.
-
On the 25th of August, a repair invoice of ₦5,000 was received and deducted from the instalment payment due on the 30th of August.
-
An additional payment of ₦15,000 was made on the 28th of August.
-
The hire purchase account was closed on the 31st of August when the final payment of ₦26,342 was received
Answer:
Hirer's Books|
Date |
Transaction |
Debit (₦) |
Credit (₦) |
|
08/01/2022 08/10/2022 08/15/2022 08/20/2022 08/25/2022 08/28/2022 08/30/2022 08/31/2022 Total |
Purchased goods Made a down payment Paid instalment Paid instalment Deducted repair invoice from instalment payment Made additional payment Received instalment Closed hire purchase account |
150,000 0 20,000 20,000 5,000 0 0 0 215,000 |
0 30,000 0 0 0 15,000 22,958 26,342 94,300 |
|
Date |
Transaction |
Debit (₦) |
Credit (₦) |
|
08/01/2022 08/05/2022 08/10/2022 08/15/2022 08/20/2022 08/25/2022 08/28/2022 08/30/2022 08/31/2022 |
Sold goods to hirer Received payment for goods sold to hirer Received down payment from hirer Received instalment from hirer Received instalment from hirer Received repair invoice deduction from hirer Received additional payment from the hirer Received final instalment payment from the hirer Closed hire purchase account with hirer payment |
0 150,000 30,000 20,000 20,000 0 15,000 2,958 26,342 213,300 |
150,000 0 0 0 0 5,000 0 0 0 186,300 |
|
Total |
Note:
-
The vendor's books show the sales made to the hirer and the payments received, including down payment and installment payments.
-
The hirer's books show the purchase made from the vendor, the payments made, and the final payment made to close the hire purchase account.
-
The vendor's books and hirer's books should balance, with total debits equal to total credits.
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