Hire purchase exercise
Salma Bhd purchased a new car on 1 January
2019 from Ashikin Bhd on a hire purchase terms under which Salma Bhd paid a
deposit of RM200,000 to be followed by four equal annual instalments of RM315,471 each, payable on 31 December. Interest is charged on outstanding balance at 10%
per annum. Cash price of the car is RM1,200,000.
The accounting year of both companies ends
on 31 December. Depreciation on the car is at 20% per annum on straight-line
basis. All the sums due were paid on due dates.
Required:
Show the relevant journal ledger entries in
the books of Salma Bhd
Prepare an extract of
Statement of Profit and Loss Account and Statement of Financial Position for
the year 2021 and 2022.
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