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Question 29 Chapter 14 – Class 11 Unimax

Kuljeet Singh
Question 29 Chapter 14 – Class 11 Unimax

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Question 29 Chapter 14 – Class 11 Unimax

29. A draws a bill for ₹ 3,000 and b accepts the same for the mutual accommodation of both of them to the extent of A 2/3 and B 1/3. A discount the same for ₹ 2,820 and remits 1/3 of proceeds to B. before the due date, B draws another bill for ₹ 4,200 on A in order to meet the first bill. The second bill is discounted for ₹ 4,080 with the help of which the first bill is met and ₹ 720 are remitted to A. before he due date of the second bill, A become bankrupt and B receives a dividend of 50 paise in a rupee in full settlement. Pass journal entries in the books of A and B.

The solution of Question 29 Chapter 14 – Class 11 Unimax

Journal for Mr. ‘X’ (Drawer)
DateParticulars
L.F.DebitCredit
      
 Bill receivable A/cDr. 3,000 
 To B’s A/c   3,000
 (Being acceptance of bill received from B for mutual accommodation)   
      
 Bank A/cDr. 2,820 
 Discount A/cDr. 180 
 To Bills receivable A/c   3,000
 (Being bill discounted with bank)   
     
 B’s A/cDr. 1,000 
 To Cash A/c  940
 To Discount A/c  60
 (Being half the amount remitted)   
     
Before Due dateB’s A/cDr. 4,200 
 To Bills payable A/c   4,200
 (Being acceptance of bill given to B)    
      
 Bank A/cDr. 720 
 Discount A/cDr. 80 
 To B’s A/c   800
 (Being cash received from B and discount allowed)    
      
Before Due dateBill payable A/cDr. 4,200 
 To B’s A/c   4,200
 (Being insolvent & bill not met)    
      
 B’s A/c (2,000+800)Dr. 2,800 
 To Cash A/c   1,400
 To Deficiency A/c   1,400
 (Being insolvent & only 50% paid to B)   

 

Journal for Mr. ‘B’ (Drawee)
DateParticulars
L.F.DebitCredit
      
 A’s A/cDr. 3,000 
 To Bill payable A/c   3,000
 (Being acceptance of bill given to A)   
      
 Cash A/cDr. 940 
 Discount A/cDr. 60 
 To A’s A/c   1,000
 (Being 1/3 amount of bill received from A with discount)   
     
Before Due dateBills receivable A/cDr. 4,200 
 To A’s A/c  4,200
 (Being acceptance of bill received from A)   
     
 Bank A/cDr. 4,080 
 Discount A/cDr. 120 
 To Bills receivable A/c   4,200
 (Being bill discounted with bank)    
      
Due DateBills payable A/cDr. 3,000 
 To Cash A/c   3,000
 (Being bill met on due date)    
      
 A’s A/cDr. 800 
 To Bank A/c   720
 To Discount A/c   80
 (Being cash paid to A)    
      
 A’s A/cDr. 4,200 
 To Bank A/c   4,200
 (Being bill not met on due date)    
      
 Cash A/cDr.   1,400 
 Bad debts A/cDr. 1,400 
 To X’s (1,000+250) A/c   2,800
 (Being A become insolvent and only 50% amount of bill received from A)   

Working Note:

(1) As soon as one party becomes insolvent after making dishonoured entry it should be found as to how much amount is due by A to B.

(2) Discounting charges of the second bill have been apportioned in the ratio in which X & Y shared the proceeds of the second bill i.e. 2:1 shown as follows:

Total proceeds received of the second bill

Amount paid on behalf of partners for 1st bill

 AB
 2,0001,000
Balance (₹ 4,080-3,000) 1,080, distributed as720360
 2,7201,360
Ratio which proceeds of the second bill shared 2:1  
Discounting charges of the second bill to be shared 8080

 

End of Solution

Check Out the Solution of all questions for this chapter:

The solutions to all questions of Chapter 14 – Bills of Exchange Unimax – Class 11 are shown as follows, click on the image of the question to get the solution.

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