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    C sold goods to D for Rs 36,470 and received two bills of exchange from D, one for Rs 16,470 at 1 month and another for Rs 20,000 at 3 months. The first bill was paid but the second bill was dishonored due to D's temporary financial difficulties. Later, it was agreed that D would pay Rs 8,020 in cash and accept a new bill for Rs 12,480 including interest. C sent the new bill to the bank for collection. On the due date, D offered Rs 12,240 in payment, which C accepted.

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    C sold goods to D for Rs 36,470 and received two bills of exchange from D, one for Rs 16,470 at 1 month and another for Rs 20,000 at 3 months. The first bill was paid but the second bill was dishonored due to D's temporary financial difficulties. Later, it was agreed that D would pay Rs 8,020 in cash and accept a new bill for Rs 12,480 including interest. C sent the new bill to the bank for collection. On the due date, D offered Rs 12,240 in payment, which C accepted.

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    C sold goods to D for Rs 36,470 and received two bills of exchange from D, one for Rs 16,470 at 1 month and another for Rs 20,000 at 3 months. The first bill was paid but the second bill was dishonored due to D's temporary financial difficulties. Later, it was agreed that D would pay Rs 8,020 in cash and accept a new bill for Rs 12,480 including interest. C sent the new bill to the bank for collection. On the due date, D offered Rs 12,240 in payment, which C accepted.

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    17 views7 pages

    Untitled Document

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    omgarg2714
    C sold goods to D for Rs 36,470 and received two bills of exchange from D, one for Rs 16,470 at 1 month and another for Rs 20,000 at 3 months. The first bill was paid but the second bill was dishonored due to D's temporary financial difficulties. Later, it was agreed that D would pay Rs 8,020 in cash and accept a new bill for Rs 12,480 including interest. C sent the new bill to the bank for collection. On the due date, D offered Rs 12,240 in payment, which C accepted.

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    of 7

    ‭On 12th May, 2011 C sold to D goods for Rs 36,470 and drew upon the‬

    ‭latter two bills of exchange; one for Rs 16,470 at one month and the‬
    ‭other for Rs 20,000 at three months. D accepted both the bills. On 5th‬
    ‭June, 2011 C sent both the bills to his bank for collection on due dates.‬
    ‭The first bill was duly met. But due to some temporary financial‬
    ‭difficulties, C failed to honour his acceptance for Rs 20,000 on the due‬
    ‭date and the bank had to pay Rs 20 as noting charges.‬

    ‭However, on 16th August, 2011 it was agreed between C and D that D‬


    ‭would immediately pay Rs 8,020 in cash and accept a new bill at three‬
    ‭months for Rs 12,480 which included interest for postponement of‬
    ‭part payment of the dishonoured bill.‬

    ‭C immediately sent the new acceptance to its bank for collection on‬
    ‭due date. On 1st October, 2011 D approached C offering Rs 12,240 for‬
    ‭retirement of his acceptance. C acceded to the request. Pass journal‬
    ‭entries for all the above mentioned transactions and prepare ledger‬
    ‭accounts in the books of C.‬

    ‭A receives three promissory notes from B, dated 1st January, 2012 for‬
    ‭3 months. One bill is for Rs 3,000, the second is for Rs 4,000 and the‬
    ‭third is for Rs 5,000. The second bill is immediately endorsed in‬
    ‭favour of C and on 4th January, 2012 the third bill is discounted with‬
    ‭the bank for Rs 4,700. Pass the entries in A’s journal assuming (i) the‬
    ‭bills are met on maturity and (ii) they are dishonoured.‬

    ‭Bills of Exchange: Problem and Solution # 2.‬

    ‭B owes C a sum of Rs 6,000. On 1st April, 2011 he gives a promissory‬


    ‭note for the amount for 3 months to C who gets it discounted with his‬
    ‭bankers for Rs 5,760. On the due date the bill is dishonoured, the bank‬
    ‭paying Rs 15 as noting charges. B then pays Rs 2,000 in cash and‬
    ‭accepts a bill of exchange drawn on him for the balance together with‬
    ‭Rs 100 as interest. This bill of exchange is for 2 months and on the due‬
    ‭date the bill is again dishonoured, C paying Rs 15 for noting charges‬
    ‭draft the journal entries to be passed in C’s books.‬

    ‭Bills of Exchange: Problem and Solution # 3.‬

    ‭X draws on Y a bill of exchange for Rs 15,000 on 1st April, 2011 for 3‬


    ‭months. Y accepts the bill and sends it to X who gets it discounted for‬
    ‭Rs 14,400. X immediately remits Rs 4,800 to Y. On the due date, X,‬
    ‭being unable to remit the amount due, accepts a bill for Rs 21,000 for‬
    ‭three months which is discounted by Y for Rs 20,055. Y sends Rs‬
    ‭3,370 to X. Before the maturity of the bill X becomes bankrupt, his‬
    ‭estate paying fifty paise in the rupee. Give the journal entries in the‬
    ‭books of X and Y. Also show X’s account in T’s books.‬

    ‭Bills of Exchange: Problem and Solution # 4.‬

    ‭On 1st January, 2011, X drew and Y accepted a bill of exchange at‬
    ‭three months for Rs 16,000. On 4th January, 2011, X got the bill‬
    ‭discounted at 12% per annum and remitted half of the proceeds to Y.‬
    ‭On 1st February, 2011, Y drew and X accepted a bill at four months for‬
    ‭Rs 12,000. On 4th February, 2011, Y got the bill discounted at 12% per‬
    ‭annum and remitted half of the proceeds to X. They both agreed to‬
    ‭share the discount equally.‬

    ‭On maturity, X met his acceptance but Y dishonoured his acceptance‬


    ‭and X had to pay for it. X drew and Y accepted a new bill at three‬
    ‭months for the original bill plus interest at 16% per annum for three‬
    ‭months. On 1st July, 2011, Y became insolvent. On 21st September,‬
    ‭2011, a final dividend of 50 paise in a rupee was received from Y’s‬
    ‭estate.‬
    ‭Bills of Exchange: Problem and Solution # 5.‬

    ‭In the books of Ram Lall, there was a balance of Rs 6,500 due by K.‬
    ‭Sampat on 31st, March, 2011 which was written off as a bad debt in‬
    ‭closing of the books on that date. On 10th May, 2011, K. Sampat paid‬
    ‭cash Rs 6,000 in full and final settlement of his dues.‬

    ‭ADVERTISEMENTS:‬

    ‭Further transaction took place between Ram Lall and K.‬


    ‭Sampat as follows:‬

    ‭ADVERTISEMENTS:‬

    ‭Bills of Exchange: Problem and Solution # 6.‬

    ‭On 1st January, 2012 Mohan draws on Ram a bill for 3 months from‬
    ‭Rs 20,000 which Ram duly accepts. Mohan discounts the bill for Rs‬
    ‭19,400. On the same date Ram draws on Mohan a bill for 3 months‬
    ‭from Rs 20,000 which is accepted by Mohan Ram gets the bill‬
    ‭discounted with his bankers at 18 per cent. On the due date, Mohan‬
    ‭meets his bill, but Ram fails to honour his acceptance, the bank having‬
    ‭to pay Rs 10 as noting charges.‬

    ‭Give journal entries in the books of Mohan.‬

    ‭Bills of Exchange: Problem and Solution # 7.‬

    ‭On 1st April, 2011 G owed H a sum of Rs 7,000 which had been‬
    ‭written off by H as bad debt. But on 4th April, 2011 G purchased goods‬
    ‭from H for Rs 8,000 and gave two promissory notes- one at two‬
    ‭months for Rs 10,000 and the other at three months for Rs 5,000. On‬
    ‭7th April, 2011 H got the bill for Rs 10,000 discounted with the bank‬
    ‭for Rs 9,800 and endorsed the second bill in favour of his creditor M.‬
    ‭On the due date, H met the first bill.‬

    ‭However, G could not honour the second bill and approached H for its‬
    ‭renewal for two months agreeing to add interest at the rate of 15% per‬
    ‭annum to the amount of the bill. H agreed on the condition that G‬
    ‭provided collateral security whereupon G endorsed two of his bills‬
    ‭receivable in favour of H; one bill was for Rs 3,000 due on 4th August,‬
    ‭2011 and the other was for Rs 2,500 due-on 11th September, 2011.‬

    ‭H received the payment for the bill for Rs 3,000 but the renewed bill‬
    ‭and the bill for Rs 2,500 were dishonoured on the due dates. On 13th‬
    ‭September, 2011 G became insolvent. On 10th December, 2011 H‬
    ‭received a first and final dividend of 40 paise in the rupee from G’s‬
    ‭estate. Pass journal entries for all the above mentioned transactions‬
    ‭and prepare the account of G in the books of H.‬

    ‭Bills of Exchange: Problem and Solution # 8.‬

    ‭Journalise the following transactions in the books of J.‬


    ‭Jaggi:‬

    ‭(a) Our acceptance to M. Madan for Rs 3,000 retired before due date,‬
    ‭rebate allowed Rs 45.‬

    ‭(b) K. Kaku’s acceptance for Rs 4,000 renewed for a further period of‬
    ‭3 months, interest charged at 15 per cent.‬

    ‭(c) Our acceptance to P. Swamy for Rs 8,000 renewed for 3 months on‬
    ‭the condition that Rs 2,000 is paid in cash immediately and the‬
    ‭remaining balance to carry interest at 18 per cent.‬
    ‭(d) D. Dutt’s promissory note for Rs 7,000 which we had endorsed in‬
    ‭favour of P. Mukeijee dishonoured. P. Mukerjee paid Rs 10 as noting‬
    ‭charges. We pay P. Mukerjee by cheque and accept from D. Dutt‬
    ‭another bill for the amount due plus interest, Rs 315.‬

    ‭(e) Our promissory note in favour of A. Alam for Rs 2,500 returned‬


    ‭unpaid due to lack of instructions to the bank. A. Alam claims Rs 2,510‬
    ‭which we pay by cheque.‬

    ‭(f) Our promissory note for Rs 5,000 in favour of Patel settled by‬
    ‭sending him Tanna’s acceptance for Rs 5,000.‬

    ‭Bills of Exchange: Problem and Solution # 9.‬

    ‭The following bills were accepted on 1st January, 2012 for 4‬


    ‭months:‬

    ‭(i) By B, Rs 10,000 and by C, Rs 15,000 in favour of A.‬

    ‭(ii) By A, Rs 20,000 and by C, Rs 5,000 in favour of B.‬

    ‭(iii) By A, Rs 10,000 and by B, Rs 20,000 in favour of C.‬

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