Question No 47 Chapter No 13

Question No 47 Chapter No 13

Additional Question

47. On 1st January 2017, A owes B Rs 60,000 for which B receives two acceptances from A, one for Rs 20,000 payable in two months, second for Rs 40,000 payable in four months in each case from 1st January.
B duly discounts both these acceptances with his bankers on 3rd Jan. at 6% p.a. before the first bill become due, A requested B to assist him in taking up the bill by providing him Rs 10,000 cash and drawing a third a third bill on A for that amount at three months from the use date of the first bill plus interest at 6% p.a. B agreed to his proposal and advanced the money after discounting the bill with his banker at 4% p.a. A week before the second bill for Rs 40,000 falls due, A again asks B to assist him to the extent of the Rs 25,000. B however is not in apposition to do this and he arrangers with A to draw to him (B) two bills for Rs 11,100 and Rs 14,200 at two months and three months them to A who discounts them with his bankers at 5% p.a. and assisted by the proceeds, duly meets the Rs 40,000 bill. B also meets his two acceptances on maturity.
On 7th June, A becomes insolvent leaving his third bill unpaid. On 1st October, a first and final dividend of 50 paise in the Rs was received from his estate.
Pass journal entries in B’s Books and prepare A’ A/c

The solution of Question No 47 Chapter No 13: –

In the books of ….
Date  Particulars
Jan.1Bill Receivable A/c(i)Dr. 20,000 
 Bill Receivable A/c(ii)Dr. 40,000 
 To A A/c   60,000
 (Being Acceptance received )    
Jan.3Bank A/cDr. 59,000 
 Discount Charges A/cDr. 1,000 
 Bill Receivable A/c   60,000
 (Being three bill drawn on Y )    
Mar.4A A/cDr. 150 
 To Interest A/c   150
 (Being interest debited to A)    
Mar.4Bill Receivable A/c(iii)Dr. 10,150 
 To A A/c   10,150
 (Being acceptance received)    
Mar.4Bank A/cDr. 10,048 
 Discounting charges A/cDr. 102 
 To Interest A/c   10,150
 (Being interest charged on Arjun)    
Mar.4A A/cDr. 10,000 
 To Bank A/c   10,000
 (Being cash paid to A)    
May.4A A/cDr. 25,300 
 To Bill payable A/c(i)   11,100
 To Bill payable A/c(ii)   14,200
 (Being bill endorsed to Y)    
Jun.4A A/cDr. 10,150 
 To Bank A/c   10,150
 (Being third bill dishonoured)    
Jul.7Bill payable A/c(i)Dr. 11,100 
 To Bank A/c   11,100
 (Being first acceptance paid)    
Aug.4Bill payable A/c(ii)Dr. 14,200 
 To Bank A/c   14,200
 (Being second acceptance paid)    
Aug.4Bank A/cDr. 17,725 
 Bad debts A/cDr. 17,725 
 To A A/c   35,450
 (Being 50 paise per Rs received in full settlement )    
Dr.A A/cCr.
2018   2018   
Jan.1To Balance b/d 60,000Jan.1By Bill Receivable A/c(i) 20,000
Mar.4To Interest A/c 150Jan.1By Bill Receivable A/c(ii) 40,000
Mar.4To Bank A/c 10,000Mar.4By Bill Receivable A/c(iii) 10,150
Mar.4To Bill Payable A/c(i) 11,100    
Mar.4To Bill Payable A/c(ii) 14,200    
Jun.7To Bank A/c 10,150    
    May. 31By Balance c/d 34,450
   1,05,600   1,05,600

Bills Payable Book | Subsidiary Books | Examples

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D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

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