Hire Purchase – Page 4

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 2022 – L1 – SB – Q6b – Hire Purchase Law

Identifying ways a hire purchase contract may be terminated.

Question

A hire purchase contract may be terminated in different ways.

Required:
State four ways by which hire purchase contract may be terminated.

Answer

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Tags: Contract Termination, Hire Purchase
Level: Level 1

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

BL – Nov 2022 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identifying the relationship between the parties in a hire purchase contract.

Question

Under hire purchase contract, the relationship between the parties is that of:

A. Mortgagor and mortgagee
B. Assignor and assignee
C. Bailor and bailee
D. Consignor and consignee
E. Vendor and vendee

Answer

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Tags: Contractual Relationship, Hire Purchase
Level: Level 1

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

BL – May 2022 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identify the type of contract where one has possession while paying in installments.

Question

A contract by which one person has possession of a product while paying for it in installments is known as
A. Bailment
B. Factoring
C. Leasing
D. Hire purchase
E. Sale in installments

Answer

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

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

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

Describing the hire purchase agreement and ways to terminate it.

Question

Kabir took possession of a Toyota Sienna bus from Auto Distributors Limited so as to add to his fleet of commercial mini vans. The price of the bus is N3.6 million payable in ten equal monthly instalments. Kabir intends to terminate the agreement that he has with Auto Distributors Limited after he has used the bus for two months and paid two instalments because his brother, Jamal, has just given him the same type of mini van.

Required:
State the nature of the agreement and FIVE ways of terminating it.

Answer

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Tags: Agreement Termination, Contract Law, Hire Purchase
Level: Level 1

Series: MAY 2021

BL – May 2021 – L1 – SA – Q13 – Hire Purchase and Consumer Credit Transactions

Identifying what hire purchase contracts do not involve.

Question

A hire purchase contract does not involve transfer of

A. Possession
B. Title
C. Indemnity
D. Proposal
E. Inventory

Answer

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Tags: Consumer Credit, Contractual Agreements, Hire Purchase
Level: Level 1

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

BL – Nov 2023 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Discusses the key elements of a hire purchase contract.

Question

A hire purchase is a contract in which the owner of goods gives another person called a hirer possession of the goods.

Required:
State FIVE elements of a hire purchase agreement. (5 Marks)

Answer

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

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2023

BL – Nov 2023 – L1 – SA – Q15 – Law of Contract

This question asks about the consideration in a hire purchase contract.

Question

Consideration in a hire purchase contract consists of:
A. Instalments
B. Purchase price
C. Rentals
D. Reversionary price
E. Deposit and balance

Answer

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

Topic: Law of Contract
Series: NOV 2023

BL – Nov 2019 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

Explaining exceptions to the rule that hirers cannot pass good title under hire purchase contracts.

Question

Under hire purchase contract, the general rule is that the hirer cannot pass a good title in the goods to a third party.
Required:
Explain briefly TWO exceptions to this rule. (4 Marks)

Answer

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Tags: Consumer Credit, Exceptions, Hire Purchase, Transfer of Title
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: NOV 2019

BL – May 2023 – L1 – SB – Q5B – Contract Law

Identify circumstances under which a hire purchase contract may be terminated.

Question

Hire purchase contract may be terminated under certain circumstances.

Required:
State FOUR circumstances under which a hire purchase contract may be terminated.

Answer

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Tags: Contract Termination, Hire Purchase, Legal Principles
Level: Level 1

Topic: Contract Law
Series: MAY 2023

BL – May 2023 – L1 – SA – Q5 – Hire Purchase and Consumer Credit Transactions

Identify the circumstances under which a hire purchase contract can be terminated.

Question

Which of the following could signify the termination of a hire purchase contract?

A. New agreement
B. Dissatisfaction
C. Reclusion
D. Reproduction
E. Discouragement

Answer

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Tags: Consumer Credit, Contract Termination, Hire Purchase, Legal Agreement
Level: Level 1

Topic: Hire Purchase and Consumer Credit Transactions
Series: MAY 2023

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.

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 2022 – L1 – SB – Q6b – Hire Purchase Law

Identifying ways a hire purchase contract may be terminated.

You're reporting an error for "BL – Nov 2022 – L1 – SB – Q6b – Hire Purchase Law"

BL – Nov 2022 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identifying the relationship between the parties in a hire purchase contract.

You're reporting an error for "BL – Nov 2022 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions"

BL – May 2022 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions

Identify the type of contract where one has possession while paying in installments.

You're reporting an error for "BL – May 2022 – L1 – SA – Q15 – Hire Purchase and Consumer Credit Transactions"

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

Describing the hire purchase agreement and ways to terminate it.

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

BL – May 2021 – L1 – SA – Q13 – Hire Purchase and Consumer Credit Transactions

Identifying what hire purchase contracts do not involve.

You're reporting an error for "BL – May 2021 – L1 – SA – Q13 – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2023 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions

Discusses the key elements of a hire purchase contract.

You're reporting an error for "BL – Nov 2023 – L1 – SB – Q3c – Hire Purchase and Consumer Credit Transactions"

BL – Nov 2023 – L1 – SA – Q15 – Law of Contract

This question asks about the consideration in a hire purchase contract.

You're reporting an error for "BL – Nov 2023 – L1 – SA – Q15 – Law of Contract"

BL – Nov 2019 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

Explaining exceptions to the rule that hirers cannot pass good title under hire purchase contracts.

You're reporting an error for "BL – Nov 2019 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions"

BL – May 2023 – L1 – SB – Q5B – Contract Law

Identify circumstances under which a hire purchase contract may be terminated.

You're reporting an error for "BL – May 2023 – L1 – SB – Q5B – Contract Law"

BL – May 2023 – L1 – SA – Q5 – Hire Purchase and Consumer Credit Transactions

Identify the circumstances under which a hire purchase contract can be terminated.

You're reporting an error for "BL – May 2023 – L1 – SA – Q5 – Hire Purchase and Consumer Credit Transactions"

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