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could not pay the third yearly instalment due on 31 December 2022, whereupon
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the Dar Machinery Ltd. repossessed the plant. Daima provided depreciation on
the plant at 10% per annum on diminishing balance method.
Required: Open up the Plant account and the Dar Machinery Ltd. account in the books
of Daima Company, assuming that books are closed on 31 December each
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year.
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6. Mimi grocery purchased a smart T.V. set on 1 October 2021 on the hire-purchase
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system from Hajis electronics Ltd. The cash price of the set was TZS 1,500,000.
Terms of payment were TZS 150,000 down and TZS 400,000 half yearly over
two years, the first instalment was to be paid on 31 March, 2022. The rate of
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interest was 12 per cent per annum.
Mimi grocery wrote off 15 per cent depreciation per annum on reducing balance
method and closed its books every year on 31st March. MIMI grocery owners failed
to pay the second instalment due on 30th September, 2022 and as a consequence,
the T.V. set was repossessed by Hajis electronics Ltd.
Required: Prepare T.V. set account and the hire vendor’s account in Mimi grocery’s
accounts.

7. On 1 July 2020 Nyanza Construction Works bought a construction machine
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from Pap Industries of the cash value of TZS 31,360,000 on the hire purchase
basis on 1 July, 2020. A sum of TZS 9,000,000 was paid at the time of delivery.
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The balance was payable in three equal annual instalments of TZS 9,000,000
each payable on 30th June, of every year. Interest was charged at 10 per cent per
annum. The Nyanza Construction Works charged for depreciation at the rate of 10
per cent per annum on straight line method. Nyanza Construction Works failed to
pay the instalment due on 30 June 2022. Pap Industries obtained the permission
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of the court to repossess the machine as a result of default by the purchaser and
having completed all the statutory requirements took possession of the machine
on 30 August 2022.
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Required: Prepare the necessary ledger accounts in the books of hire purchaser.

Student’s Book Form Five
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