1. Depreciation on hirepurchased asset is claimed by(a) Hire vendor(b) Hire purchaser(c) Either the hire vendor or thehire purchaser as per the agreement between them(d) No depreciation is claimed tillthe last instalment is paid/ received
2. Under instalment payment system,ownership of goods(a) is transferred at the time ofpayment of last instalment(b) is not transferred(c) is transferred at the time ofsigning the contract(d) None of theabove
X Transport Ltd. purchased from Delhi Motors 3 Tempos costing Rs. 50,000 each on the hire purchase system on 1-1-2011. Payment was to be made Rs. 30,000 down and the remainder in 3 equal annual instalments payable on 31-12-2011, 31-12-2012 and 31-12-2013 together with interest @ 9%. X Transport Ltd. write off depreciation at the rate of 20% on the diminishing balance. It paid the instalment due at the end of the first year i.e. 31-12-2011 but could not pay the next on 31-12-2012. Delhi Motors agreed to leave one Tempo with the purchaser on 1-1-2013 adjusting the value of the other 2 Tempos against the amount due on 31-12-2012. The Tempos were valued on the basis of 30% depreciation annually. Show the necessary accounts in the books of X Transport Ltd. and Delhi Motors Tempos for the years 2011, 2012 and 2013.
What does materiality mean?
