Repossession – NBC Institute

BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Define hire purchase and advise on rights after repossession under partial payment.

Question

A hire purchase agreement is a transaction with strict rules and regulations.

Required:
i. What is hire purchase?
ii. Case Scenario:
Ronke entered into a hire purchase agreement to buy a Nissan Micra car belonging to Fred. Ronke paid the sum of N900,000 out of the agreed price of N1,000,000. After unsuccessful demands by Fred for the balance of N100,000 on the car, Fred seized the car in front of Ronke’s house.

Advise Ronke on her rights, if any.

Answer

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Tags: Buyer’s Rights, Consumer Rights, Hire Purchase, Payment Default, Repossession
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2020

FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications

Calculation of accounting entries for machinery purchased under hire purchase and repossessed.

Question

Lease and hire purchase are very popular options for financing assets. These options vary from each other in many aspects: ownership of the asset, depreciation, rental payments, duration, tax impact, repairs and maintenance of the asset, and the extent of finance.

Thereatta Ltd is a listed advertising company operating in Ghana. The Board of Thereatta Ltd (Thereatta) was contemplating the most suitable option to finance one of its machinery before settling on Hire Purchase. On 1 January 2016, Thereatta acquired a machinery on hire-purchase basis from Askona Ltd agency. The terms of the Hire Purchase agreement require Thereatta to make four annual installments of GH¢6,000 each, payable at the end of each year. There is no down payment. Interest is charged at 20% per annum and is included in the annual installments.

Because of financial difficulties, Thereatta, after having paid the first and second installments respectively, could not pay the third yearly installment due on 31 December 2018, whereas the vendor repossessed the machinery. Thereatta provides depreciation on the machinery at 10% per annum according to the written-down value method.

Required:

Show the accounting treatment of the Machinery account and the account of Askona Ltd agency in the books of Thereatta. (All workings must be shown).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Depreciation, Hire Purchase, Interest Calculations, Repossession
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAY 2019

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

Question

Serwaa Akoto, a VAT registered trader, sold goods to Kofi Asirifi under a credit agreement. Kofi Asirifi could not pay, and Serwaa Akoto repossessed the goods.

Required:
What are the VAT implications? (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Credit Agreement, Repossession, Supply of Goods, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2020

BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Define hire purchase and advise on rights after repossession under partial payment.

Question

A hire purchase agreement is a transaction with strict rules and regulations.

Advise Ronke on her rights, if any.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Buyer’s Rights, Consumer Rights, Hire Purchase, Payment Default, Repossession
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2020

FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications

Calculation of accounting entries for machinery purchased under hire purchase and repossessed.

Question

Required:

Show the accounting treatment of the Machinery account and the account of Askona Ltd agency in the books of Thereatta. (All workings must be shown).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Depreciation, Hire Purchase, Interest Calculations, Repossession
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAY 2019

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

Question

Serwaa Akoto, a VAT registered trader, sold goods to Kofi Asirifi under a credit agreement. Kofi Asirifi could not pay, and Serwaa Akoto repossessed the goods.

Required:
What are the VAT implications? (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Credit Agreement, Repossession, Supply of Goods, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2020

Question Tag: Repossession

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BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Define hire purchase and advise on rights after repossession under partial payment.

FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications

Calculation of accounting entries for machinery purchased under hire purchase and repossessed.

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Define hire purchase and advise on rights after repossession under partial payment.

FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications

Calculation of accounting entries for machinery purchased under hire purchase and repossessed.

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

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Question Tag: Repossession

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BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Define hire purchase and advise on rights after repossession under partial payment.

You're reporting an error for "BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions"

FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications

Calculation of accounting entries for machinery purchased under hire purchase and repossessed.

You're reporting an error for "FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications"

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

You're reporting an error for "PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties"

BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Define hire purchase and advise on rights after repossession under partial payment.

You're reporting an error for "BL – Nov 2020 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions"

FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications

Calculation of accounting entries for machinery purchased under hire purchase and repossessed.

You're reporting an error for "FR – May 2019 – L2 – Q5b – Financial Reporting Standards and Their Applications"

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

You're reporting an error for "PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties"

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