Question Tag: Hire Purchase

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STP – Feb 2007 – L3 – Q5 – VAT Apportionment

Explain VAT rules for goods on sale or return and input tax apportionment for taxable and exempt supplies.

Question

a) Tanji Enterprises Ltd. operates a Fuel Filling Station and a huge Supermarket in Tamale within the same premises. A joint tax audit team from the LTU Office visited Tanji and noted that Tanji supplies taxable and non-taxable goods and services to customers but fails to notice the split distinction between these services. The VAT team therefore has disallowed some claims and apportioned others to reflect the true VAT claimable.

Required:
i. Explain the VAT rules for goods supplied on sale or return.
ii. Discuss the apportionment of input tax for taxable and exempt supplies.

(b).Required:

Discuss the VAT rules on the timing of supply for the following:

i. Goods or services applied to own use, gifted, or supplied under hire purchase or finance lease.

ii. Continuous or metered supplies like electricity.

iii. Goods supplied under a hire purchase agreement or finance lease.

iv. Goods or services supplied under rental agreements or periodic payments.

v. Ancillary supplies.

Answer

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Tags: Continuous Supplies, Hire Purchase, Own Use, Time of Supply, VAT
Level: Level 3

Topic: Strategic Indirect Tax Management
Series: FEB 2007

ATAX – May 2017 – L3 – Q3a – Capital Gains Tax (CGT)

Compute Capital Gains Tax for hire purchase transactions and explain the implications of hire purchase interest on CGT.

Question

Global Company Nigeria Limited, a construction company based in Abuja, commenced business on January 7, 2009. The company has struggled to acquire necessary equipment due to poor financial results.

At a directors’ meeting on November 6, 2012, the company decided to approach a finance house for assistance. They provided the following information:

The company purchased an excavator on hire purchase on March 1, 2013, and paid a deposit of N32,000,000.
The excavator’s cost price was N55,000,000, with the balance payable in 25 monthly installments of N1,200,000 starting April 1, 2013.

The excavator was sold as follows:

For N65,000,000 after installment payments on January 1, 2014.
For N69,000,000 after installment payments on November 1, 2014.

You are required to:

i. Calculate the Capital Gains Tax (CGT) for the relevant Assessment Year, assuming the sales values above. (14 Marks)
ii. Explain the implications of hire purchase interest on Capital Gains Tax computations. (2 Marks)

Answer

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Tags: Assessment Year, Capital gains tax, Hire Purchase, Tax computation
Level: Level 3

Topic: Capital Gains Tax (CGT)

AT – May 2018 – L3 – SB – Q3b – Capital Gains Tax

Calculate capital gains for asset disposal under hire purchase with specific instalment conditions.

Question

Alero Manufacturing Limited, Abeokuta, Ogun State, purchased a chargeable asset on hire purchase in year 2014. The deposit paid for the purchase was N800,000. The balance was to be paid in forty instalments of N75,000. The cash price of the asset was N2,400,000.

Required:

Calculate the capital gains, assuming the asset was sold as detailed below:

(i) For N4,200,000 after payment of thirty instalments. (7 Marks)

(ii) For N4,500,000 after payment of all the instalments. (7 Marks)

Answer

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Tags: Capital gains tax, Disposal, Hire Purchase, instalment payments, Interest Element
Level: Level 3

Topic: Capital Gains Tax (CGT)
Series: MAY 2018

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

BL – Nov 2020 – L1 – SA – Q13 – Hire Purchase and Consumer Credit Transactions

Objective question on the form of consideration in hire purchase agreements.

Question

13. The consideration for a hire purchase is
A. Payment of shares
B. Price of goods
C. Installmental payment
D. Bill of exchange
E. Cost of goods

Answer

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Tags: Consideration, Hire Purchase, Installment Payment, Payment Terms
Level: Level 1

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

BL – May 2012 – L1 – SB – Q5B – Agency Law

State two differences between a hire purchase agreement and a sale agreement.

Question

A hire purchase agreement and a sale agreement are similar but not identical. Required: State any TWO differences between a hire purchase agreement and a sale agreement.

Answer

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Tags: Business Law, Contract Law, Hire Purchase
Level: Level 1

Topic: Agency Law
Series: MAY 2012

BL – May 2012 – L1 – SA – Q7 – Hire Purchase and Consumer Credit Transactions

State the type of goods covered by the Hire Purchase Act 2004.

Question

State the type of goods to which the Hire Purchase Act 2004 is applicable irrespective of the amount involved.

Answer

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Tags: Business Law, Consumer Credit, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2012

BL – May 2012 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identify the parties involved in a hire purchase relationship.

Question

A hire purchase relationship is one between a:

A. Hiree and a hirer
B. Hiree and a bank
C. Seller and a servant
D. Master and a servant
E. Bailor and a bailee

Answer

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Tags: Business Law, Consumer Credit, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2012

BL – May 2012 – L1 – SA – Q6 – Hire Purchase and Consumer Credit Transactions

Identifying the obligation that does not fall under a hirer's responsibility.

Question

Which of the following is NOT a hirer’s obligation?

A. To take delivery of the goods
B. To take proper care of the goods
C. Not to part with the possession of the goods
D. To report to the owner every week
E. To return the goods to the owner when the agreement is terminated

Answer

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Tags: Business Law, Consumer Credit, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2012

BL – Nov 2011 – L1 – SB – Q3b – Hire Purchase and Consumer Credit Transactions

Defining a hire purchase agreement and explaining its essential features.

Question

Define “hire purchase agreement” and explain THREE of its essential features.

Answer

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Tags: Bailment, Contract, Hire Purchase, Property in Goods
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q19 – Hire Purchase and Consumer Credit Transactions

This question asks about the interest payable in the first year on a hire purchase agreement.

Question

A car with a cash price of N750,000 was acquired on hire purchase on 1 January 2010. The agreement required an initial deposit of N150,000 and three equal yearly installments payable effective 31 December 2010. Interest of 15% is payable on the balance outstanding at the end of each year. How much interest is payable at the end of first year?
A. N22,500
B. N45,000
C. N90,000
D. N112,500
E. N135,000

Answer

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Tags: Hire Purchase, Interest Calculations
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2011

BL – Nov 2012 – L1 – SA – Q11 – Hire Purchase

Identify the goods covered under the Hire Purchase Act.

Question

State the type of goods to which the Hire Purchase Act is applicable irrespective of the amount involved.

Answer

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Tags: Hire Purchase, Motor Vehicles
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2012

BL – Nov 2012 – L1 – SA – Q12 – Hire Purchase

Identify which is NOT a duty of the hirer.

Question

Which of the following is NOT a duty of the hirer?
A. To accept delivery of the goods
B. To ensure that he gives a weekly report to the seller
C. To take reasonable care of the goods
D. To pay the installments when due
E. To redeliver the goods to the owner or his agent, upon the termination of the hire purchase contract

Answer

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Tags: Consumer Rights, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2012

BL – May 2013 – L1 – SA – Q12 – Hire Purchase and Consumer Credit Transactions

This question tests knowledge of a transaction with an option to buy goods.

Question

A transaction in which the person in possession of goods has an option to buy the goods or terminate the relationship and return the goods to the owner at any time is called ___________.

Answer

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Tags: Financial Transactions, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2013

BL – May 2014 – L1 – SB – Q3 – Sale of Goods,

Discussing classes of goods under the Sale of Goods Act and characteristics of hire purchase transactions.

Question

a. In commercial transactions, goods and services are offered and sold. Explain briefly TWO classes of goods under the Sale of Goods Act. (5 Marks)

b. In hire purchase agreements, goods are delivered to the hirer who pays some money to the owner of goods as deposit. Explain briefly TWO characteristics of a hire purchase transaction. (5 Marks)

c. Steven insured his five-storey building with ABC Insurance Company Limited and paid the premium for the building. Steven had been told by his engineers that the building is weak and may collapse in no distant future, but Steven did not disclose this to his insurers, thinking it was immaterial. A year after the policy was issued, the building collapsed and the insurance company has refused to indemnify Steven on the ground of non-disclosure of a material fact. State the relevant law and advise the parties. (5 Marks)

Answer

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Tags: Contract Law, Hire Purchase, Sale of Goods
Level: Level 1

Topic: Sale of Goods
Series: MAY 2014

BL – Nov 2015 – L2 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

Explain two rights of a hirer under a hire purchase transaction.

Question

It is possible for a person to have possession of a property when he has not fully paid for it. Such a facility is possible through hire purchase as a form of commercial transaction.

Required:

Explain TWO rights of a hirer under a hire purchase transaction.
(4 Marks)

Answer

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Tags: Commercial Transactions, Hire Purchase, Hirer Rights
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2015

BL – Nov 2015 – L2 – SB – Q6a – Hire Purchase and Consumer Credit Transactions

Explain four duties of the owner in a hire purchase contract.

Question

The major parties in a hire-purchase agreement are the owner and the hirer.

Required:

State and explain FOUR duties of the owner in a hire purchase contract.
(8 Marks)

Answer

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Tags: Hire Purchase, Hire Purchase Agreement, Owner Duties
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2015

BL – May 2014 – L1 – SA – Q9 – Hire Purchase and Consumer Credit Transactions

Understanding the term for possession in hire purchase after payment.

Question

In hire purchase transaction, the hirer is put in possession of goods on payment of the consideration known as ____________.

Answer

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Tags: Consideration, Hire Purchase, Possession
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2014

BL – Nov 2013 – L1 – SB – Q3c – Hire Purchase, Consumer Credit Transactions

Explaining two key characteristics of hire purchase transactions.

Question

Explain briefly TWO characteristics of a hire purchase transaction. (5 Marks)

Answer

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Tags: Bailor and Bailee Relationship, Contract Law, Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2013

BL – Nov 2013 – L1 – SA – Q9 – Hire Purchase and Consumer Credit Transactions

Identifies the relationship between the owner and the hirer in a hire purchase transaction.

Question

The relationship between the owner and the hirer in a hire purchase transaction is that of _____________________.

Answer

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Tags: Consumer Credit, Hire Purchase, Legal Relationships, Short Answer
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2013

Question Tag: Hire Purchase

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STP – Feb 2007 – L3 – Q5 – VAT Apportionment

Explain VAT rules for goods on sale or return and input tax apportionment for taxable and exempt supplies.

You're reporting an error for "STP – Feb 2007 – L3 – Q5 – VAT Apportionment"

ATAX – May 2017 – L3 – Q3a – Capital Gains Tax (CGT)

Compute Capital Gains Tax for hire purchase transactions and explain the implications of hire purchase interest on CGT.

You're reporting an error for "ATAX – May 2017 – L3 – Q3a – Capital Gains Tax (CGT)"

AT – May 2018 – L3 – SB – Q3b – Capital Gains Tax

Calculate capital gains for asset disposal under hire purchase with specific instalment conditions.

You're reporting an error for "AT – May 2018 – L3 – SB – Q3b – Capital Gains Tax"

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"

BL – Nov 2020 – L1 – SA – Q13 – Hire Purchase and Consumer Credit Transactions

Objective question on the form of consideration in hire purchase agreements.

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BL – May 2012 – L1 – SB – Q5B – Agency Law

State two differences between a hire purchase agreement and a sale agreement.

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BL – May 2012 – L1 – SA – Q7 – Hire Purchase and Consumer Credit Transactions

State the type of goods covered by the Hire Purchase Act 2004.

You're reporting an error for "BL – May 2012 – L1 – SA – Q7 – Hire Purchase and Consumer Credit Transactions"

BL – May 2012 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identify the parties involved in a hire purchase relationship.

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BL – May 2012 – L1 – SA – Q6 – Hire Purchase and Consumer Credit Transactions

Identifying the obligation that does not fall under a hirer's responsibility.

You're reporting an error for "BL – May 2012 – L1 – SA – Q6 – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2011 – L1 – SB – Q3b – Hire Purchase and Consumer Credit Transactions

Defining a hire purchase agreement and explaining its essential features.

You're reporting an error for "BL – Nov 2011 – L1 – SB – Q3b – Hire Purchase and Consumer Credit Transactions"

FA – Nov 2011 – L1 – SA – Q19 – Hire Purchase and Consumer Credit Transactions

This question asks about the interest payable in the first year on a hire purchase agreement.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q19 – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2012 – L1 – SA – Q11 – Hire Purchase

Identify the goods covered under the Hire Purchase Act.

You're reporting an error for "BL – Nov 2012 – L1 – SA – Q11 – Hire Purchase"

BL – Nov 2012 – L1 – SA – Q12 – Hire Purchase

Identify which is NOT a duty of the hirer.

You're reporting an error for "BL – Nov 2012 – L1 – SA – Q12 – Hire Purchase"

BL – May 2013 – L1 – SA – Q12 – Hire Purchase and Consumer Credit Transactions

This question tests knowledge of a transaction with an option to buy goods.

You're reporting an error for "BL – May 2013 – L1 – SA – Q12 – Hire Purchase and Consumer Credit Transactions"

BL – May 2014 – L1 – SB – Q3 – Sale of Goods,

Discussing classes of goods under the Sale of Goods Act and characteristics of hire purchase transactions.

You're reporting an error for "BL – May 2014 – L1 – SB – Q3 – Sale of Goods,"

BL – Nov 2015 – L2 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

Explain two rights of a hirer under a hire purchase transaction.

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BL – Nov 2015 – L2 – SB – Q6a – Hire Purchase and Consumer Credit Transactions

Explain four duties of the owner in a hire purchase contract.

You're reporting an error for "BL – Nov 2015 – L2 – SB – Q6a – Hire Purchase and Consumer Credit Transactions"

BL – May 2014 – L1 – SA – Q9 – Hire Purchase and Consumer Credit Transactions

Understanding the term for possession in hire purchase after payment.

You're reporting an error for "BL – May 2014 – L1 – SA – Q9 – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2013 – L1 – SB – Q3c – Hire Purchase, Consumer Credit Transactions

Explaining two key characteristics of hire purchase transactions.

You're reporting an error for "BL – Nov 2013 – L1 – SB – Q3c – Hire Purchase, Consumer Credit Transactions"

BL – Nov 2013 – L1 – SA – Q9 – Hire Purchase and Consumer Credit Transactions

Identifies the relationship between the owner and the hirer in a hire purchase transaction.

You're reporting an error for "BL – Nov 2013 – L1 – SA – Q9 – Hire Purchase and Consumer Credit Transactions"

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