Calculate the value of repossessed stock

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Problem: Jalani Distributors sold three light commercial vans to Jain Enterprises on January 1, 2017 on hire purchase system. The price of each van was Rs. 90, 000 payment of which was to be made as follows:

(i) Rs. 30, 000 as down payment for each van

(ii) Remaining amount in 3 equal installment along with interest @15%

Jain Enterprises were charging depreciation @ 20% each year on written down value method. After payment of the first installment as on December 31, 2017, they could not pay further installments. It was agreed between the parties for repossession of two van adjusting their values against the amount due. For the purpose of repossession, depreciation @ 30% p.a. was charged.

Repossessed goods were repaired at a cost Rs. 2,000 and were then sold for Rs. 92,000.

Calculate the value of repossessed stock and show the necessary accounts in the books of both the parties.

Reference no: EM132431166

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