Answered step by step
Verified Expert Solution
Question
1 Approved Answer
925 Sept. 1 Ravi A/C Dr. 10,000 To Bank Alc 10,000 (Being the new bill dishonoured due to Ravi's insolvency) Sept. 20 Ravi Alc Dr.
925 Sept. 1 Ravi A/C Dr. 10,000 To Bank Alc 10,000 (Being the new bill dishonoured due to Ravi's insolvency) Sept. 20 Ravi Alc Dr. 5,400 To Bank Alc 5,400 (Being the second customer's bill dishonoured at maturity) Bad Debt A/C Dr. 3,000 To Ravi Alc 3,000 (Being the amount written-off as bad debt) Working Note: Calculation of discount: 2 New bill (due date 7th Oct., 2017) = 310,000 X 6/100 x 3/12 150 Ist customer's bill (due date Aug. 20) = 37,000 x 6/100 x 41/365 47 (approx.) 2nd customer's bill (due date Sept. 20) = 35.400 6/100 x 72/365 64 (approx.) 261 Dr. Ravi Account Cr. Date Particulars Date Particulars 1.4.2017 To Balance b/f 10,000 1.4.2017 By Bills Receivable Alc 10,000 7.7.2017 To Bank A/c (dishonoured) 10,000 7.7.2017 By Bils Receivable A/c (New bill) 10,000 1.9.2017 To Bank A/c (New bill dishonoured) 10,000 7.7.2017 By Bills Receivable A/c Customer's Bill) 12,400 20.9.2017 To Bank A/c (2nd customer's bill dishonoured) 5,400 20.9.2017 By Bad Debt Alc 3,000 35.400 35,400 Illustration 26 Ram draw upon Shyam three bills of exchange of 10,000, 78,000 and 6,000 respectively. A week later the first bill of 10,000 was cancelled on mutual agreement. Shyam paid 4,000 in cash and for the balance amount, together with interest of 600, he accepted a new bill. This new bill was endorsed to Jadu along with a cheque for 2,000 in full settlement of his claim for 9,000. The second bill for ? 8,000 was discounted by Ram for 7,750. All the bills were dishonoured at maturity as Shyam became insolvent. However, his estates realised 40 paise per rupee. Noting charges were incurred by Ram 75 and by Jadu 50. Prepare Bills Receivable Account, Shyam Account and Jadu Account in the books of Ram reflecting the above mentioned transactions
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started