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INTERMEDIATE (IPC) EXAMINATION: MAY, 2016

Less: Depreciation on Addition @ 10% p.a. (5,000 x 10/100x9/12)

W.D.V. of Machinery & tools as on 31.03.2015
2.

375
27,125

Written Down Value of Furniture and Fixtures

W.D.V. as on 01.04.2014

`
50,000

Less: Depreciation on W.D.V. @ 10% p.a.

5,000
45,000

Add: Addition during the year on 01.01.2015

10,000
55,000

Less: Depreciation on Addition @ 10% p.a. (10,000 x 10/100x3/12)

W.D.V. of Furniture & Fixtures as on 31.03.2015
12. Ratio of interest and amount due =

250
54,750

Rate of int erest

10 1

11
100 Rate of int erest 110

There is no interest element in the down payment as it is paid on the date of the
transaction. Instalments paid after certain period includes interest portion also.
Therefore, to ascertain cash price, interest will be calculated from last instalment to first
instalment as follows:
Calculation of Interest and Cash Price
No. of
instalments

Amount due at the

time of instalment

Interest

Cumulative
Cash price

[1]

[2]

[3]

3rd

4,40,000

1/11 of ` 4,40,000 =` 40,000

4,00,000

2nd

8,40,000

1/11 of ` 8,40,000= ` 76,364

7,63,636

1st

12,03,636

1/11of ` 12,03,636= ` 1,09,421

10,94,215

(2-3) = [4]

Total cash price = ` 10,94,215 + 4,80,000 (down payment) =` 15,74,215.

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