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Page No 17.69:

Question 1:

Calculate the due dates of the bills in the following cases:

  Date of the Bills Period
I. 1st February, 2017 2 months
II. 31st January, 2017 3 months
III. 30th September, 2017 2 months
IV. 30th September, 2017 3 months
V. 29th December, 2017 2 months
VI. 31st December, 2017 2 months
VII. 15th July, 2017 30 days
VIII 27th January, 2016 1 month

Answer:

Due Date of Bill = Date of Bill Drawn + Period + Grace Days
 

S. No.
Date of Bill Drawn
(1)
Period
(2)
Grace Days
(3)
Due Date
(1 + 2 + 3)
I.
February 01, 2017
2 months
3 days
April 04, 2017
II.
January 31, 2017
3 months
3 days
May 03, 2017
III.
September 30, 2017
2 months
3 days
December 03, 2017
IV.
September 30, 2017
3 months
3 days
January 02, 2018
V.
December 29, 2017
2 months
3 days
March 03, 2018
VI.
December 31, 2017
2 months
3 days
March 03, 2018
VII.
July 15, 2017
30 days
3 days
August 17, 2017
VIII.
January 27, 2016
1 month
3 days
March 01, 2016

Page No 17.69:

Question 2:

Find out the due dates of the bills in the following cases:

  Date of the Bills Period
I. 29th May, 2017 4 months
II. 31st March, 2017 1 months
III. 21st July, 2017 60 days
IV. 14th May, 2017 90 days
V. 28th January, 2016 1 month
VI. 31st January, 2016 1 month
  Emergency holiday 22nd September.  

Answer:

Due Date of Bill = Date of Bill Drawn + Period + Grace Days
 

S. No.
Date of Bill Drawn
(1)
Period
(2)
Grace Days
(3)
Due Date
(1 + 2 + 3)
I.
May 29, 2017
4 months
3 days
October 01, 2017
II.
March 31, 2017
1 month
3 days
May 03, 2017
III.
July 21, 2017
60 days
3 days
September 23, 2017
IV.
May 14, 2017
90 days
3 days
August 14, 2017
V.
January 28, 2016
1 month
3 days
March 02, 2016
VI.
January 31, 2016
1 month
3 days
March 03, 2016

Note: When due date falls on;

1. Public holiday (here October 2, 2017 and August 15, 2017), then due date is preceding date.

2. Emergency holiday (here September 22, 2017), then due date is succeeding date.

Page No 17.69:

Question 3:

On 1st January, 2017, Ajay sold goods to Bhushan for ₹ 10,000. Ajay draws a bill of exchange for two months for the amount due which Bhushan accepts and returns it to Ajay, Bhushan met the bill on the due date. Pass Journal entries in the books of Ajay and Bhushan.

Answer:

Books of Ajay 
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Bhushan Dr.  
10,000
 
 
  To Sales A/c    
 
10,000
 
(Goods sold to Bhushan)    
 
 
 
     
 
 
Jan. 01
Bills Receivable A/c Dr.  
10,000
 
 
  To Bhushan    
 
10,000
 
(Bhushan accepted  the bill)    
 
 
 
     
 
 
Mar. 04
Cash A/c Dr.  
10,000
 
 
  To Bills Receivable A/c    
 
10,000
 
(Bill honoured on maturity)    
 
 
 
Books of Bhushan
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Purchases A/c Dr.  
10,000
 
 
  To Ajay    
 
10,000
 
(Goods purchased from Ajay)    
 
 
 
     
 
 
Jan. 01
Ajay Dr.  
10,000
 
 
  To Bills Payable A/c    
 
10,000
 
(Bill drawn by Ajay, accepted)    
 
 
 
     
 
 
Mar. 04
Bills Payable A/c Dr.  
10,000
 
 
  To Cash A/c    
 
10,000
 
(Bill honoured on maturity)    
 
 

Page No 17.69:

Question 4:

On Jan. 1,2017, Tarun purchased goods from Arun for ₹ 20,000 and immediately drew a promissory note in favour of Arun payable after 1 month. Date of maturity of the promissory note was declared emergency holiday by the Government of India under the Negotiable Instrument Act 1881. Tarun met the promissory note according to the provisions of law.
Pass the necessary Journal entries in the books of Arun and Tarun.

Answer:

Books of Arun
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Tarun Dr.  
20,000
 
 
  To Sales A/c    
 
20,000
 
(Goods sold to Tarun)    
 
 
 
     
 
 
Jan. 01
Bills Receivable A/c Dr.  
20,000
 
 
  To Tarun    
 
20,000
 
(Tarun accepted the promissory note)    
 
 
 
     
 
 
Feb. 05
Cash A/c Dr.  
20,000
 
 
  To Bills Receivable A/c    
 
20,000
 
(Promissory note honoured on maturity)    
 
 
 
Books of Tarun
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Purchases A/c Dr.  
20,000
 
 
  To Arun    
 
20,000
 
(Goods purchased from Arun)    
 
 
 
     
 
 
Jan. 01
Arun Dr.  
20,000
 
 
  To Bills Payable A/c    
 
20,000
 
(Promissory note drawn by Arun, accepted)    
 
 
 
     
 
 
Feb. 05
Bills Payable A/c Dr.  
20,000
 
 
  To Cash A/c    
 
20,000
 
(Promissory note honoured on maturity)    
 
 

Note: When due date falls on Emergency holiday (here February 04, 2017), then due date is succeeding date i.e. February 05, 2017.



Page No 17.70:

Question 5:

On Feb. 6, 2017 A sold goods for ₹ 1,00,000 to B. B paid 40% immediately on which A allowed a cash discount of ₹ 500. For the balance A drew a bill on B payable after 30 days. Due date of bill was a public holiday and the bill was met as per the provisions of Negotiable Instrument Act. Journalise the above transactions in the books of A and B.

Answer:

Books of A
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Feb. 06
B Dr.  
1,00,000
 
 
  To Sales A/c    
 
1,00,000
 
(Goods sold to B)    
 
 
 
     
 
 
Feb. 06
Cash A/c Dr.  
39,500
 
 
Discount Allowed A/c Dr.  
500
 
 
Bills Receivable A/c Dr.  
60,000
 
 
  To B    
 
1,00,000
 
(B accepted the bill)    
 
 
 
     
 
 
Mar. 10
Cash A/c Dr.  
60,000
 
 
  To Bills Receivable A/c    
 
60,000
 
(Bill honoured on maturity)    
 
 
                                                    
Books of B
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Feb. 06
Purchases A/c Dr.  
1,00,000
 
 
  To A    
 
1,00,000
 
(Goods purchased from A)    
 
 
 
     
 
 
Feb. 06
A Dr.  
1,00,000
 
 
  To Cash A/c    
 
39,500
 
  To Discount Received A/c    
 
500
 
  To Bills Payable A/c    
 
60,000
 
(Bill drawn by A, accepted)    
 
 
 
     
 
 
Mar. 10
Bills Payable A/c Dr.  
60,000
 
 
  To Cash A/c    
 
60,000
 
(Bill honoured on maturity)    
 
 

Note: When due date falls on Public holiday (here March 11, 2017), then due date is preceding date i.e. March 10, 2017. 

Page No 17.70:

Question 6(A):

Vishal sold goods for ₹ 7,000 to Manju on Jan. 5, 2017 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal's draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank @ 12% p.a. On the due date Manju met her acceptance. Journalise the above transactions in the books of Vishal and Manju.

Answer:

Books of Vishal
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 05
Manju Dr.  
7,000
 
 
  To Sales A/c    
 
7,000
 
(Goods sold to Manju)    
 
 
 
     
 
 
Jan. 05
Bills Receivable A/c Dr.  
7,000
 
 
  To Manju    
 
7,000
 
(Manju accepted the bill)    
 
 
 
     
 
 
Jan. 05
Bank A/c Dr.  
6,860
 
 
Discounting Charges A/c Dr.  
140
 
 
  To Bills Receivable A/c    
 
7,000
 
(Bill discounted with bank @ 12% p.a. for 2 months)    
 
 
                                                                 
Books of Manju
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 05
Purchases A/c Dr.  
7,000
 
 
  To Vishal    
 
7,000
 
(Goods purchased from Vishal)    
 
 
 
     
 
 
Jan. 05
Vishal Dr.  
7,000
 
 
  To Bills Payable A/c    
 
7,000
 
(Bill drawn by Vishal, accepted)    
 
 
 
     
 
 
Mar. 08
Bills Payable A/c Dr.  
7,000
 
 
  To Cash A/c    
 
7,000
 
(Bill honoured on maturity)    
 
 

Working Note:

Calculation of Discounting Charges

Discounting Charges= 7,000×12100×212=Rs 140

Page No 17.70:

Question 6(B):

On 15th February, 2017, X sold goods to Y for ₹ 6,000. On the same day, Y accepted a bill drawn upon him by X for three months for ₹ 6,000. X immediately discounted the bill at 15% p.a. at his bank and Y met the bill on maturity. Make Journal entries in the books of both the parties.

Answer:

Books of X
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Feb. 15
Y Dr.  
6,000
 
 
  To Sales A/c    
 
6,000
 
(Goods sold to Y)    
 
 
 
     
 
 
Feb. 15
Bills Receivable A/c Dr.  
6,000
 
 
  To Y    
 
6,000
 
(Y accepted the bill)    
 
 
 
     
 
 
Feb. 15
Bank A/c Dr.  
5,775
 
 
Discounting Charges A/c Dr.  
225
 
 
  To Bills Receivable A/c    
 
6,000
 
(Bill discounted with bank @ 15% p.a. for 3 months)    
 
 
 
Books of Y
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Feb. 15
Purchases A/c Dr.  
6,000
 
 
  To X    
 
6,000
 
(Goods purchased from X)    
 
 
 
     
 
 
Feb. 15
X Dr.  
6,000
 
 
  To Bills Payable A/c    
 
6,000
 
(Bill drawn by X, accepted)    
 
 
 
     
 
 
May 18
Bills Payable A/c Dr.  
6,000
 
 
  To Cash A/c    
 
6,000
 
(Bill honoured on maturity)    
 
 

Working Note:

Calculation of Discounting Charges

Discounting Charges= 6,000×15100×312=Rs 225
 

Page No 17.70:

Question 7:

B owed ₹ 5,100 to A. On 15th January, 2017, he accepted a bill for ₹ 5,000 for two months drawn by A in full settlement of his debt. On 18th January, 2017, A endorsed the bill to his creditor C. The bill was duly met on the date of maturity. Pass Journal entries in the books of A, B and C.

Answer:

Books of A
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan.15
Bills Receivable A/c Dr.  
5,000
 
 
Discount Allowed A/c Dr.  
100
 
 
  To B    
 
5,100
 
(B accepted the bill)    
 
 
 
     
 
 
Jan. 18
C Dr.  
5,000
 
 
  To Bills Receivable A/c    
 
5,000
 
(Bill endorsed in favour of C)    
 
 
                                                          
Books of B
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan.15
A Dr.  
5,100
 
 
  To Bills Payable A/c    
 
5,000
 
  To Discount Received A/c    
 
100
 
(Bill drawn by A, accepted)    
 
 
 
     
 
 
Mar. 18
Bills Payable A/c Dr.  
5,000
 
 
  To Cash A/c    
 
5,000
 
(Bill honoured on maturity)    
 
 
 
Books of C
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 18
Bills Receivable A/c Dr.  
5,000
 
 
  To A    
 
5,000
 
(Bills receivable was received from A)    
 
 
 
     
 
 
Mar. 18
Cash A/c Dr.  
5,000
 
 
  To Bills Receivable A/c    
 
5,000
 
(Bill honoured on maturity)    
 
 

Page No 17.70:

Question 8:

On 10th January, 2017, A sells goods to B for ₹ 12,000. On that date, B accepted a bill drawn upon him by A at two months for ₹ 12,000. A retains the bill till due date and on due date sends the bill to the Banker for collection. In due course, A receives the information from the Bank that the bill has been duly met.
Pass Journal Entries in the books of A and B.

Answer:

Books of A
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 10
B Dr.  
12,000
 
 
  To Sales A/c    
 
12,000
 
(Goods sold to B)    
 
 
 
     
 
 
Jan. 10
Bills Receivable A/c Dr.  
12,000
 
 
  To B    
 
12,000
 
(B accepted the bill)    
 
 
 
     
 
 
Mar. 13
Bill Sent for Collection A/c Dr.  
12,000
 
 
  To Bills Receivable A/c    
 
12,000
 
(Bills sent to bank for collection)    
 
 
 
     
 
 
Mar. 13
Bank A/c Dr.  
12,000
 
 
  To Bills Sent for Collection A/c    
 
12,000
 
(Bill honoured on maturity)    
 
 
 
Books of B
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 10
Purchases A/c Dr.  
12,000
 
 
  To A    
 
12,000
 
(Goods purchased from A)    
 
 
 
     
 
 
Jan .10
A Dr.  
12,000
 
 
  To Bills Payable A/c    
 
12,000
 
(Bill drawn by A, accepted)    
 
 
 
     
 
 
Mar. 13
Bills Payable A/c Dr.  
12,000
 
 
  To Cash A/c    
 
12,000
 
(Bill honoured on maturity)    
 
 

Page No 17.70:

Question 9:

On Jan. 15, 2017, Kusum sold goods for ₹ 30,000 to Pushpa and drew upon her three bills of exchanges of ₹ 10,000 each payable after one month, two months and three months respectively. The first bill was retained by Kusum till its maturity. The second bill was endorsed by her in favour of her creditor Khushboo and the third bill was discounted by her immediately @ 6% p.a. All the bills were met by Pushpa, Journalise the above transactions in the books of Kusum and Pushpa.

Answer:

Books of Kusum
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 15
Pushpa Dr.  
30,000
 
 
  To Sales A/c    
 
30,000
 
(Goods sold to Pushpa)    
 
 
 
     
 
 
Jan. 15
Bills Receivable A/c (1) Dr.  
10,000
 
 
Bills Receivable A/c (2) Dr.  
10,000
 
 
Bills Receivable A/c (3) Dr.  
10,000
 
 
  To Pushpa    
 
30,000
 
(Pushpa accepted the bills)    
 
 
 
     
 
 
Jan. 15
Khushboo Dr.  
10,000
 
 
  To Bills Receivable A/c (2)    
 
10,000
 
(Bill endorsed in favour of Khushboo)    
 
 
 
     
 
 
Jan. 15
Bank A/c Dr.  
9,850
 
 
Discounting Charges A/c Dr.  
150
 
 
  To Bills Receivable A/c (3)    
 
10,000
 
(Bill discounted with the bank @ 6% p.a. for 3 months)    
 
 
 
     
 
 
Feb. 18
Cash A/c Dr.  
10,000
 
 
  To Bills Receivable A/c (1)    
 
10,000
 
(Bill honoured on maturity)    
 
 

 

Books of Pushpa
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 15
Purchases A/c Dr.  
30,000
 
 
  To Kusum    
 
30,000
 
(Goods purchased from Kusum)    
 
 
 
     
 
 
Jan. 15
Kusum Dr.  
30,000
 
 
  To Bills Payable A/c (1)    
 
10,000
 
  To Bills Payable A/c (2)    
 
10,000
 
  To Bills Payable A/c (3)    
 
10,000
 
(Bills drawn by Kusum, accepted)    
 
 
 
     
 
 
Feb. 18
Bills Payable A/c Dr.  
10,000
 
 
  To Cash A/c    
 
10,000
 
(Bill (1) honoured on maturity)    
 
 
 
     
 
 
Mar. 18
Bills Payable A/c (2) Dr.  
10,000
 
 
  To Cash A/c    
 
10,000
 
(Bill (2) honoured on maturity)    
 
 
 
     
 
 
Apr. 18
Bills Payable A/c (3) Dr.  
10,000
 
 
  To Cash A/c    
 
10,000
  (Bill (3) honoured on maturity)    
 
 


Working Note:

Calculation of Discounting Charges

Page No 17.70:

Question 10:

X draws on Y a bill for ₹ 4,000 which was duly accepted by Y. Y meets the bill on its due date. Show what entries would be passed in the books of X and Y under each of the following circumstances:
(i) If X retains the bill till due date.
(ii) If X discounts the same with his banker paying ₹ 100 for discount.
(iii) If X endorses the same to his creditor Z, in full settlement of his debt of ₹ 4,080.
(iv) If X sends the bill to his banker for collection.

Answer:

Books of X
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
 
Bill drawn by X    
 
 
 
Bills Receivable A/c Dr.  
4,000
 
 
  To Y    
 
4,000
 
(Y accepted the bill)    
 
 
 
     
 
 
 
Case (i): Bill retained till maturity    
 
 
 
Cash A/c Dr.  
4,000
 
 
  To Bills Receivable A/c    
 
4,000
 
(Bill honoued on maturity)    
 
 
 
     
 
 
 
Case (ii): Bill discounted with bank    
 
 
 
Bank A/c Dr.  
3,900
 
 
Discounting Charges A/c Dr.  
100
 
 
  To Bills Receivable A/c    
 
4,000
 
(Bill discounted with the bank)    
 
 
 
     
 
 
 
Case (iii): Bill endorsed to Z    
 
 
 
Z Dr.  
4,080
 
 
  To Bills Receivable A/c    
 
4,000
 
  To Discount Received A/c    
 
80
 
(Bill endorsed in favour of Z)    
 
 
 
     
 
 
 
Case (iv): Bill sent to bank for collection    
 
 
 
Bills Sent for Collection A/c Dr.  
4,000
 
 
  To Bills Receivable A/c    
 
4,000
 
(Bill sent to bank for collection)    
 
 
       
 
 
 
Bank A/c Dr.  
4,000
 
 
  To Bill Sent for Collection A/c    
 
4,000
 
(Bill honoured on maturity)    
 
 
                                                                     
Books of Y
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
 
Bill accepted by Y    
 
 
 
X Dr.  
4,000
 
 
  To Bills Payable A/c    
 
4,000
 
(Bill drawn by Y, accepted)    
 
 
 
     
 
 
 
Same entry will be passed in all the four cases    
 
 
 
Bills Payable A/c Dr.  
4,000
 
 
  To Cash A/c    
 
4,000
 
(Bill honoured on maturity)    
 
 



Page No 17.71:

Question 11:

X made the following sales to Y:

Date Amount (₹)
Jan. 01, 2017 20,000
Jan. 08, 2017 25,000
Jan. 10, 2017 10,000
Jan. 15, 2017 40,000

For all the sales X drew bills on Y payable after 60 days. Bill drawn on Jan. 01, 2017 was retained by X with him till its due date. The bill drawn on Jan. 08, 2017 was discounted by X from the bank at 9% p.a. The bill drawn on Jan. 10, 2017 was endorsed by X to his creditor Z in full settlement of ₹ 10,400. On March 12, 2017 X sent the bill drawn on Jan. 15, 2017 to his bank for collection. All the bills were met by Y on due dates.
Pass necessary journal entries in the books of X and Y and prepare Y' s account in the books of X and X's account in the books of Y.

Answer:

Books of X
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Y Dr.  
20,000
 
 
  To Sales A/c    
 
20,000
 
(Goods sold to Y)    
 
 
 
     
 
 
Jan. 01
Bills Receivable A/c (1) Dr.  
20,000
 
 
  To Y    
 
20,000
 
(Y accepted the bill)    
 
 
       
 
 
Jan. 08
Y Dr.  
25,000
 
 
  To Sales A/c    
 
25,000
  (Goods sold to Y)    
 
 
       
 
 
Jan. 08
Bills Receivable A/c (2) Dr.  
25,000
 
 
  To Y    
 
25,000
 
(Y accepted the bill)    
 
 
 
     
 
 
Jan. 08
Bank A/c Dr.  
24,630
 
 
Discounting Charges A/c Dr.  
370
 
 
  To Bills Receivable A/c (2)    
 
25,000
 
(Bill discounted with the bank @ 9% p.a. for 60 days)    
 
 
 
     
 
 
Jan. 10
Y Dr.  
10,000
 
 
  To Sales A/c    
 
10,000
  (Goods sold to Y)    
 
 
       
 
 
Jan.10
Bills Receivable A/c (3) Dr.  
10,000
 
 
  To Y    
 
10,000
 
(Y accepted the bill)    
 
 
 
     
 
 
Jan.10
Z Dr.  
10,400
 
 
  To Bills Receivable A/c (3)    
 
10,000
 
  To Discount Received A/c    
 
400
 
(Bill endorsed in favour of Z)    
 
 
 
     
 
 
Jan. 15
Y Dr.  
40,000
 
 
  To Sales A/c    
 
40,000
  (Goods sold to Y)    
 
 
       
 
 
Jan.15
Bills Receivable A/c (4) Dr.  
40,000
 
 
  To Y    
 
40,000
 
(Y accepted the bill)    
 
 
 
     
 
 
Mar. 05
Cash A/c Dr.  
20,000
 
 
  To Bills Receivable A/c (1)    
 
20,000
 
(Bill honoured on maturity)    
 
 
 
     
 
 
Mar. 12
Bill Sent for Collection A/c Dr.  
40,000
 
 
  To Bills Receivable A/c (4)    
 
40,000
 
(Bill sent to bank for collection)    
 
 
 
     
 
 
Mar. 19
Bank A/c Dr.  
40,000
 
 
  To Bills for Collection A/c    
 
40,000
 
(Bill honoured on maturity)    
 
 
 
Y’s  Account
Dr.
 
Cr.
Date
Particulars
J.F.
Amount
(Rs)
Date
Particulars
J.F.
Amount
(Rs)
2017
   
 
2017
   
 
Jan. 01
Sales A/c  
20,000
Jan. 01
Bills Receivable A/c (1)  
20,000
Jan. 08
Sales A/c  
25,000
Jan. 08
Bills Receivable A/c (2)  
25,000
Jan. 10
Sales A/c  
10,000
Jan. 10
Bills Receivable A/c (3)  
10,000
Jan. 15
Sales A/c  
40,000
Jan. 15
Bills Receivable A/c (4)  
40,000
 
   
95,000
 
   
95,000
               
 
Books of Y
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Purchases A/c Dr.  
20,000
 
 
  To X    
 
20,000
 
(Goods purchased from X)    
 
 
 
     
 
 
Jan. 01
X Dr.  
20,000
 
 
  To Bills Payable A/c (1)    
 
20,000
 
(Bill drawn by X, accepted)    
 
 
       
 
 
Jan. 08
Purchases A/c Dr.  
25,000
 
 
  To X    
 
25,000
 
(Goods purchased from X)    
 
 
 
     
 
 
Jan. 08
X Dr.  
20,000
 
 
  To Bills Payable A/c (2)    
 
20,000
 
(Bill drawn by X, accepted)    
 
 
 
     
 
 
Jan. 10
Purchases A/c Dr.  
10,000
 
 
  To X    
 
10,000
 
(Goods purchased from X)    
 
 
 
     
 
 
Jan.10
X Dr.  
10,000
 
 
  To Bills Payable A/c (3)    
 
10,000
 
(Bill drawn by X, accepted)    
 
 
 
     
 
 
Jan. 15
Purchases A/c Dr.  
40,000
 
 
  To X    
 
40,000
 
(Goods purchased from X)    
 
 
 
     
 
 
Jan. 15
X Dr.  
40,000
 
 
  To Bills Payable A/c (4)    
 
40,000
 
(Bill drawn by X, accepted)    
 
 
 
     
 
 
Mar. 05
Bills Payable A/c (1) Dr.  
20,000
 
 
  To Cash A/c    
 
20,000
 
(Bill honoured on maturity)    
 
 
 
     
 
 
Mar. 12
Bills Payable A/c (2) Dr.  
25,000
 
 
  To Cash A/c    
 
25,000
 
(Bill honoured on maturity)    
 
 
 
     
 
 
Mar.14
Bills Payable A/c (3) Dr.  
10,000
 
 
  To Cash A/c    
 
10,000
 
(Bill honoured on maturity)    
 
 
 
     
 
 
Mar.19
Bills Payable A/c (4) Dr.  
40,000
 
 
  To Cash A/c    
 
40,000
 
(Bill honoured on maturity)    
 
 
 
X’s  Account
Dr.
 
Cr.
Date
Particulars
J.F.
Amount
(Rs)
Date
Particulars
J.F.
Amount
(Rs)
2017
   
 
2017
   
 
Jan. 01
Bills Payable A/c (1)  
20,000
Jan. 01
Purchases A/c  
20,000
Jan. 08
Bills Payable A/c (2)  
25,000
Jan. 08
Purchases A/c  
25,000
Jan. 10
Bills Payable A/c (3)  
10,000
Jan. 10
Purchases A/c  
10,000
Jan. 15
Bills Payable A/c (4)  
40,000
Jan. 15
Purchases A/c  
40,000
 
   
95,000
 
   
95,000
               

Working Note:

Calculation of Discounting Charges

Discounting Charges= 25,000×9100×60365=Rs 370 

Page No 17.71:

Question 12:

On January 1, 2017, Ajay sold goods to Balbir for ₹ 10,000 at a discount of 20%. On that date, Balbir accepted a bill, drawn on him by Ajay for ₹ 8,000 payable 3 months after sight. Having surplus funds, Balbir paid off the bill on 4th March, 2017 and was allowed a rebate of 18% per annum. Show Journal entries in the books of Ajay and Balbir.

Answer:

Book of Ajay
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Balbir Dr.  
8,000
 
 
Discount Allowed A/c    
2,000
 
 
  To Sales A/c    
 
10,000
 
(Goods sold to Balbir)    
 
 
 
     
 
 
Jan. 01
Bills Receivable A/c Dr.  
8,000
 
 
  To Balbir    
 
8,000
 
(Bill accepted by Balbir)    
 
 
 
     
 
 
Mar. 04
Cash A/c Dr.  
7,880
 
 
Rebate A/c Dr.  
120
 
 
  To Bills Receivable A/c    
 
8,000
 
(Bill retired under the rebate of 18% p.a. for one month)    
 
 
 
Books of Balbir
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2017
 
 
 
 
 
Jan. 01
Purchases A/c Dr.  
8,000
 
 
  To Ajay    
 
8,000
 
(Goods purchased from Ajay)    
 
 
 
     
 
 
Jan.01
Ajay Dr.  
8,000
 
 
  To Bills Payable A/c    
 
8,000
 
(Bill drawn by Ajay, accepted)    
 
 
 
     
 
 
Mar. 04
Bills Payable A/c Dr.  
8,000
 
 
  To Cash A/c    
 
7,880
 
  To Rebate A/c    
 
120
 
(Bill retired under the rebate of 18% p.a. for one month)    
 
 

Working Note:

Calculation of amount of Rebate

 Amount of Rebate= 8,000×18100×112=Rs 120 

Page No 17.71:

Question 13:

On 17th April, 2016, X sold goods to Y for ₹ 80,000 and draws a bill for 2 months upon Y for the amount due. Y accepted the bill and returned it to X. On due date the bill became dishonoured and X paid ₹ 400 as Noting Charges. Fifteen days later Y pays the amount due to X. Pass Journal entries in the books of both the parties.

Answer:

Books of X
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2016
 
 
 
 
 
Apr. 17
Y
Dr.
 
80,000
 
 
  To Sales A/c
   
 
80,000
 
(Goods sold to Y)
   
 
 
 
     
 
 
Apr. 17
Bills Receivable A/c
Dr.
 
80,000
 
 
  To Y
   
 
80,000
 
(Y accepted the bill)
   
 
 
 
     
 
 
June 20
Y
Dr.
 
80,400
 
 
  To Bills Receivable A/c
   
 
80,000
 
  To Cash A/c
   
 
400
 
(Bill dishonoured on due date and noting charges received)
   
 
 
 
     
 
 
July 05
Cash A/c
Dr.
 
80,400
 
 
  To Y
   
 
80,400
 
(Cash received from Y)
   
 
 
                                               
Books of Y
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2016
 
 
 
 
 
Apr. 17
Purchases A/c
Dr.
 
80,000
 
 
  To X
   
 
80,000
 
(Goods purchased from X)
   
 
 
 
     
 
 
Apr. 17
X
Dr.
 
80,000
 
 
  To Bills Payable A/c
   
 
80,000
 
(Bill drawn by X, accepted)
   
 
 
 
     
 
 
June 20
Bills Payable A/c
Dr.
 
80,000
 
 
Noting Charges A/c
Dr.
 
400
 
 
  To X
   
 
80,400
 
(Bills dishonoured  on due date and notice charged paid)
   
 
 
 
     
 
 
July 05
X
Dr.
 
80,400
 
 
  To Cash A/c
   
 
80,400
 
(Cash paid to X)
   
 
 

Page No 17.71:

Question 14(A):

On 1st April, 2016, B accepts a bill drawn by A at three months for ₹ 8,000 in payment of debt. On the due date the acceptance is dishonoured and A gets the bill noted paying ₹ 100. On 4th July, 2016 A draws a new bill payable after 73 days provided interest is paid in cash @ 15% p.a. To this B is agreeable. The bill is met on maturity.
Record these transactions in the Journal of both the parties.

Answer:

Books of A
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2016
     
 
 
Apr. 01
Bills Receivable A/c
Dr.
 
8,000
 
 
  To B
   
 
8,000
 
(B accepted the bill)
   
 
 
 
     
 
 
July 04
B
Dr.
 
8,100
 
 
  To Bills Receivable A/c
   
 
8,000
 
  To Cash A/c
   
 
100
 
(Bill dishonoured on due date and noting charges received)
   
 
 
 
     
 
 
July 04
B
Dr.
 
243
 
 
  To Interest A/c
   
 
243
 
(Interest due to be received)
   
 
 
 
     
 
 
July 04
Cash A/c
Dr.
 
243
 
 
Bills Receivable A/c
Dr.
 
8,100
 
 
  To B
   
 
8,343
 
(B accepted the new bill)
   
 
 
 
     
 
 
Sept. 18
Cash
Dr.
 
8,100
 
 
  To Bills Receivable A/c
   
 
8,100
 
(Bill honoured on maturity)
   
 
 
                                                                         
Books of B
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2016
 
 
 
 
 
Apr. 01
A
Dr.
 
8,000
 
 
  To Bills Payable A/c
   
 
8,000
 
(Bill drawn by A, accepted)
   
 
 
 
     
 
 
July 04
Bills Payable A/c
Dr.
 
8,000
 
 
Noting Charges A/c
Dr.
 
100
 
 
  To A
   
 
8,100
 
(Bill dishonoured on due date and noting charges paid)
   
 
 
 
     
 
 
July 04
Interest A/c
Dr.
 
243
 
 
  To A
   
 
243
 
(Interest due to be paid)
   
 
 
 
     
 
 
July 04
A
Dr.
 
8,343
 
 
  To Cash A/c
   
 
243
 
  To Bills Payable A/c (New)
   
 
8,100
 
(New bill drawn by A, accepted)
   
 
 
 
     
 
 
Sept. 18
Bills Payable A/c
Dr.
 
8,100
 
 
  To Cash A/c
   
 
8,100
 
(Bill honoured on maturity)
   
 
 

Working Note:

Calculation of amount of Interest

Amount of Interest= 8,100×15100×73365=Rs 243

Page No 17.71:

Question 14(B):

On 15th October, 2016, Y purchased goods worth ₹ 75,000 from X, and accepted a three months bill for this amount drawn by X. On the due date, it was dishonoured. Noting charges paid by X ₹ 600. On 18th January, 2017, Y requested X for renewal of the bill for another two months, for which X agrees, provided that interest is paid @ 15% p.a. in cash. Make Journal entries of these transactions in the books of X and Y.

Answer:

Books of X
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2016
     
 
 
Oct. 15
Y
Dr.
 
75,000
 
 
  To Sales A/c
   
 
75,000
 
(Goods sold to Y)
   
 
 
 
     
 
 
Oct. 15
Bills Receivable A/c
Dr.
 
75,000
 
 
  To Y
   
 
75,000
 
(Y accepted the bill)
   
 
 
2017
     
 
 
Jan. 18
Y
Dr.
 
75,600
 
 
  To Bills Receivable A/c
   
 
75,000
 
  To Cash A/c
   
 
600
 
(Bill dishonoured on due date and noting charges paid)
   
 
 
 
     
 
 
Jan. 18
Y
Dr.
 
1,890
 
 
  To Interest A/c
   
 
1,890
 
(Interest due to be received)
   
 
 
 
     
 
 
Jan. 18
Cash A/c
Dr.
 
1,890
 
 
Bills Receivable A/c
Dr.
 
75,600
 
 
  To Y
   
 
77,490
 
(Y accepted the new bill)
   
 
 
 
     
 
 
Mar. 21
Cash
Dr.
 
75,600
 
 
  To Bills Receivable A/c
   
 
75,600
 
(Bill honoured on maturity)
   
 
 

 

Books of Y
Journal
Date
Particulars
L.F.
Debit
Amount
(Rs)
Credit
Amount
(Rs)
2016
 
 
 
 
 
Oct. 15
Purchases A/c
Dr.
 
75,000
 
 
  To X
   
 
75,000
 
(Goods purchased from X)
   
 
 
 
     
 
 
Oct. 15
X
Dr.
 
75,000
 
 
  To Bills Payable A/c
   
 
75,000
 
(Bill drawn by X, accepted)
   
 
 
 
     
 
 
2017
     
 
 
Jan. 18
Bills Payable A/c
Dr.
 
75,000
 
 
Noting Charges A/c
Dr.
 
600
 
 
  To X
   
 
75,600
 
(Bill dishonoured on due date and noting charges paid)
   
 
 
 
     
 
 
Jan. 18
Interest A/c
Dr.
 
1,890
 
 
  To X