Hamsa transpoters Ltd purchased from Delhi Motors 3 tempo costing Rs50,000 each on the hire purchase system on 01.01.2011.Payment was made Rs 30,000 down and the remainder in 3 equal annual installment payable on 31.12.2011, 31.12.2012, 31.12.2013 together with interest ot 9% p.a. Hamsa Transpoter Ltd writes off depreciation at 20% on the deminishing balance.It paid the installment due at the end of the first year ie 31.12.2011 but couldnot pay the next on 31.12.2012.Delhi motor agreed to leave one tempo with the purchaser on 01.01.2013 adjusting the value of other 2 tempos against the amount due on 01.01.2013.The Tempos were valued on the basis of 30% depreciation annually.
Show the neccesary account in the books of Hamsa transpoter Ltd for the year 2011,2012,2013
Please anyone from the forum can expalin the meaning of statement given in pink colour.
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