Question No 49 Chapter No 13

Question No 49 Chapter No 13

Additional Question

49. Ram Ratam Sold goods to Ahmed for Rs 1,00,000 on 30th June 2017 for which latter accepts 4 bills of Rs 25,000 each drawn on him payable after 2,4,6 and 8 months respectively. Ram Ratan retained the first bill. The second bill was sent by him for collection. The third bill was endorsed by him to C in part of payment of Rs 40,000 owed to him. The fourth bill was discounted by him with his bankers at a discount of 15% p.a.
The first bill was meet on the due date. As regards the second bill, Ahmed met Ram Ratan two days before the maturity date of the bill and paid him Rs 10,000 and accepted a fresh bill for 30 days for the balance with the interest @18% p.a. this bill as well at the third bill were met by the drawer.
Ahmed was declared an insolvent on 31st December 2017 and on the forth bill becoming due, the bank debited Ram Ratan with the amount of the bill and charges of Rs 2,500. it is ascertained by Ram Ratan that estate of Ahmed will not be in a position to meet liabilities to an extent of more than 40%
What will be the journal entries to be made in the books of Ram Ratan to record the above transaction

The solution of Question No 49 Chapter No 13: –

In the books of Ram Ratam
Date  Particulars
Jun.30Ahmed A/cDr. 1,00,000 
 To Sale A/c   1,00,000
 (Being sold goods to Ahmed)    
Jun.30Bill receivable A/c (i)Dr. 25,000 
 Bill receivable A/c (ii)Dr. 25,000 
 Bill receivable A/c (iii)Dr. 25,000 
 Bill receivable A/c (iv)Dr. 25,000 
 To Ahmed A/c   1,00,000
 (Being four bills drawn on Ahmed)    
Jun.30Bill sent for collection A/cDr. 25,000 
 Bill Receivable A/c(ii)   25,000
 (Being bill sent for collection)    
Jun.30C A/cDr. 25,000 
 To Bill receivable A/c (iii)   25,000
 To Discount A/c   15,000
 (Being acceptance received)    
Jun.30Bank A/cDr. 23,750 
 Discount charges A/cDr. 1,250 
 To Bill receivable A/c (iv)   25,000
 (Being bill discounted from bank )    
Sep.3Cash A/cDr. 25,000 
 To Bill Receivable A/c(i)   25,000
 (Being cash received )    
Oct.1Ahmed A/cDr. 25,000 
 To Bill receivable A/c (ii)   25,000
 (Being bill dishonoured )    
Oct.1Cash A/cDr. 10,000 
 To Ahmed A/c   10,000
 (Being bill dishonored)    
Oct.1Ahmed A/cDr. 225 
 To Interest A/c   225
 (Being interest charged on Ahmed)    
Oct.1Bill Receivable A/cDr. 15,225 
 To Ahmed A/c   15,225
 (Being bill drawn on Ahmed )    
Dec.31Ahmed A/cDr. 27,500 
 To Bill Receivable A/c   25,000
 To Noting Charges A/c   2,500
 (Being bill dishonored plus noting charges)    
Jun.30Cash A/cDr. 11,000 
 Bad debts A/cDr. 16,500 
 To Ahmed A/c   27,500
 (Being cash received from Ahmed and made bad debts)    

Bills Payable Book | Subsidiary Books | Examples

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

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ISC Accounts 11 20 Image min 197x300 - Question No 49 Chapter No 13 - D.K Goal 11 Class
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