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

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

Determines the basis of possession in a hire purchase transaction.

Question

In Hire Purchase transactions, goods are in possession of the hirer in consideration of

A. Instalmental payments
B. Full payments
C. Non payments
D. Future payment
E. The close relationship between the parties

Answer

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Tags: Consumer Credit, Contract Law, Hire Purchase, Multiple Choice
Level: Level 1

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

BL – Nov 2015 – L1 – SA – Q18 – Hire Purchase and Consumer Credit Transactions

Identifying duties not required of a hirer in a Hire Purchase contract.

Question

In Hire Purchase contract, the duties of the hirer include the following EXCEPT
A. Acceptance of delivery
B. Duty of care of the goods
C. Payment of instalment
D. Duty to buy the goods
E. Duty not to sell the goods

Answer

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Tags: Consumer Credit, Hire Purchase, Legal Duties, Multiple Choice
Level: Level 1

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

BL – May 2018 – L1 – SB – Q6 – Employment Law

State rights of beneficiaries, differentiate dismissal from interdiction, and discuss rights of owners in hire purchase agreements.

Question

a. The beneficiaries under a trust have certain rights in a situation where the trustee does not administer the trust diligently.

Required:
State FOUR rights of a beneficiary against abuse of powers of a trustee. (6 Marks)

b. One of the ways by which a contract of employment could be terminated is by dismissal of the employee.

Required:
(i) Differentiate between dismissal and interdiction. (4 Marks)
(ii) State FOUR reasons for the dismissal of an employee. (4 Marks)

c. The owner of the goods in a contract of hire purchase has some rights against a third party who has acquired no good title to the goods under the agreement.

Required:
State THREE rights of the owner against a third party that has acquired no good title to the goods under a hire purchase contract. (6 Marks)

Answer

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Tags: Employment Contracts, Hire Purchase, Trusts
Level: Level 1

Topic: Employment law
Series: MAY 2018

BL – May 2018 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identify the party with the option to purchase goods in a hire purchase agreement.

Question

The party who has the option to purchase goods in a Hire Purchase Agreement is the
A. Hirer
B. Hiree
C. Owner
D. Insurance company
E. Bailee

Answer

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Tags: Contracts, Hire Purchase, Ownership
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2018

BL – Nov 2014 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

State and explain two pieces of information required in a hire purchase memorandum under the Hire Purchase Act of 1965.

Question

One of the innovations introduced into the hire purchase contract by the Hire Purchase Act of 1965 is the preparation of a memorandum evidencing the agreement.
Required:
State and explain any TWO pieces of information that a hire purchase memorandum must contain.
(Total 5 Marks)

Answer

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

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

BL – Nov 2014 – L1 – SB – Q5b – Hire Purchase and Consumer Credit Transactions

Explain three general obligations of the hirer in a hire purchase agreement at common law.

Question

Hire Purchase, in ordinary parlance, means an agreement entered into to hire some goods and subsequently pay by instalments.
You are required to explain any THREE of the general obligations of the hirer at Common Law.
(Total 6 Marks)

Answer

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Tags: Common Law, Hire Purchase, Obligations
Level: Level 1

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

BL – Nov 2014 – L1 – SA – Q17 – Hire Purchase and Consumer Credit Transactions

Identify the incorrect characteristic of a Hire Purchase contract.

Question

Generally, a Hire Purchase contract has the following characteristics EXCEPT
A. Bailee and Bailor
B. Written agreement
C. Deposit of a specified sum of money
D. Possession of goods by the hirer
E. The agreement that cannot be terminated

Answer

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Tags: Bailment, Consumer Credit, Contracts, Hire Purchase
Level: Level 1

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

BL – Nov 2021 – L1 – SB – Q5b – Hire Purchase and Consumer Credit Transactions

hire purchase default

Question

Chukwudi defaulted in the sum of ₦150 out of ₦500,000 in the payment of his installments under a hire purchase agreement. The owner repossessed the goods.

Required:
i. Explain briefly the duty of a hirer relating to the payment of hire purchase installments (2 Marks).
ii. Advise Chukwudi, who is thinking of challenging in court the repossession of the goods by the owner on the grounds that it is unfair since he had almost completed payment of the cash price (3 Marks).

Answer

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Tags: Hire Purchase
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2021

BL – May 2022 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

State two rights of a hirer under a hire purchase contract.

Question

Bola has hired a car under a contract of hire purchase from CAB Car Rentals and wants to know if he has any rights under the contract.

Required:
State TWO rights of Bola under the contract.

Answer

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Tags: Contract, Hire Purchase, Hirer's Rights
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2022

BL – Nov 2021 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identifying the liability of the owner for breaching a hire purchase warranty.

Question

An owner that is in breach of a warranty under a hire purchase agreement is liable to
A. Pay damages to the hirer
B. Forfeit every right under the agreement
C. Lose his right to further installment payments
D. Refund all installments already paid by the hirer
E. Repudiate the agreement

Answer

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Tags: Hire Purchase, Warranty
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2021

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.

You're reporting an error for "BL – Nov 2020 – L1 – SA – Q13 – Hire Purchase and Consumer Credit Transactions"

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.

You're reporting an error for "BL – May 2012 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions"

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"

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

Determines the basis of possession in a hire purchase transaction.

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

BL – Nov 2015 – L1 – SA – Q18 – Hire Purchase and Consumer Credit Transactions

Identifying duties not required of a hirer in a Hire Purchase contract.

You're reporting an error for "BL – Nov 2015 – L1 – SA – Q18 – Hire Purchase and Consumer Credit Transactions"

BL – May 2018 – L1 – SB – Q6 – Employment Law

State rights of beneficiaries, differentiate dismissal from interdiction, and discuss rights of owners in hire purchase agreements.

You're reporting an error for "BL – May 2018 – L1 – SB – Q6 – Employment Law"

BL – May 2018 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identify the party with the option to purchase goods in a hire purchase agreement.

You're reporting an error for "BL – May 2018 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2014 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

State and explain two pieces of information required in a hire purchase memorandum under the Hire Purchase Act of 1965.

You're reporting an error for "BL – Nov 2014 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2014 – L1 – SB – Q5b – Hire Purchase and Consumer Credit Transactions

Explain three general obligations of the hirer in a hire purchase agreement at common law.

You're reporting an error for "BL – Nov 2014 – L1 – SB – Q5b – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2014 – L1 – SA – Q17 – Hire Purchase and Consumer Credit Transactions

Identify the incorrect characteristic of a Hire Purchase contract.

You're reporting an error for "BL – Nov 2014 – L1 – SA – Q17 – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2021 – L1 – SB – Q5b – Hire Purchase and Consumer Credit Transactions

hire purchase default

You're reporting an error for "BL – Nov 2021 – L1 – SB – Q5b – Hire Purchase and Consumer Credit Transactions"

BL – May 2022 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

State two rights of a hirer under a hire purchase contract.

You're reporting an error for "BL – May 2022 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2021 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identifying the liability of the owner for breaching a hire purchase warranty.

You're reporting an error for "BL – Nov 2021 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions"

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