Question No 22 Chapter No 13 – D.K Goal 11 Class

Question No 22 Chapter No 13

Insolvency of the Acceptor

22. A sells goods for Rs 8,000 to B on Jan 1, 2017 and on the same date draws a bill for 3 months on the latter for the amount. B accepts it and retunes it to A, who discounts it with his banker for Rs 7,850. on the date, due date the bill is dishonoured. Noting charges of Rs 150 were paid by the bank. B then pays Rs 3,000 in cash and accepts a new bill at three months for Rs 5,350. Before maturity, B became insolvent and a final dividend of 50 paise in the Rs was received. Give journal entries to record this transaction in the books of A and B.

The solution of Question No 22 Chapter No 13: –

In the books of A
Date	Particulars		L.F.	Debit	Credit
2018
Jan.1	B A/c	Dr.		8,000
	To Sale A/c				8,000
	(Being goods sold to B.)
Jan.1	Bill Receivable A/c	Dr.		8,000
	To B A/c				8,000
	(Being three bills drew on B and acceptance received from him.)
Jan.1	Bank A/c	Dr.		7,850
	Discount A/c	Dr.		150
	To Bill Receivable A/c				8,000
	(Being bill discounted from the bank)
Apr.04	Bill Receivable A/c	Dr.		8,000
	Noting Charges A/c	Dr.		150
	To Bank A/c				8,150
	(Being bill dishonoured and noting charges )
Apr.04	Cash A/c	Dr.		3,000
	To B A/c				3,000
	(Being cash received from B)
Apr.04	Bill Receivable A/c	Dr.		5,350
	To B A/c				5,350
	(Being the third bill was dishonoured )
Apr.04	Cash A/c	Dr.		3,264
	Bad debts A/c	Dr.		4,896
	To Bill Receivable A/c				5,350
	(Being the third bill was dishonoured )

In the books of B
Date	Particulars		L.F.	Debit	Credit
2018
Jan.1	Purchases A/c	Dr.		8,000
	To A A/c				8,000
	(Being purchases goods from A)
Jan.1	A A/c	Dr.		8,000
	To Bill Payable A/c				8,000
	(Being three bills drew by Satish acceptance by us.)
Apr.04	Bill Payable A/c	Dr.		8,000
	To A A/c				8,000
	(Being cash paid to Amit)
Apr.04	A A/c	Dr.		3,000
	To Cash A/c				3,000
	(Being cash paid to A)
Apr.04	A A/c	Dr.		5,350
	To Bill Payable A/c				5,350
	(Being purchases goods from A.)
Dec.07	Bill Payable A/c (iii)	Dr.		5,350
	To Cash A/c				3,264
	To Deficiency A/c				4,896
	(Being bill dishonoured and paid 40% in cash )

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

• Chapter 1 Evolution of Accounting & Basic Accounting Terms
• Chapter 2 Accounting Equations
• Chapter 3 Meaning and Objectives of Accounting
• Chapter 4 Double Entry System
• Chapter 5 Books of Original Entry – Journal 
• Chapter 6 Accounting for Goods and Service Tax (GST) (Coming soon)
• Chapter 7 Books of Original Entry – Cash Book (Coming soon)
• Chapter 8 Books of Original Entry – Special Purpose Subsidiary Books (Coming soon)
• Chapter 9 Ledger (Coming soon)
• Chapter 10 Trial Balance and Errors (Coming soon)
• Chapter 11 Bank Reconciliation Statement (Coming soon)
• Chapter 12 Depreciation (Coming soon)
• Chapter 13 Bills of Exchange (Coming soon)
• Chapter 14 Generally Accepted Accounting Principles(GAAP) 
• Chapter 15 Bases of Accounting
• Chapter 16 Accounting Standards and International Financial Reporting Standard(IFRS) (Coming soon)
• Chapter 17 Capital and Revenue 
• Chapter 18 Provisions and Reserves 
• Chapter 19 Final Accounts (Coming soon)
• Chapter 20 Final Accounts – With Adjustments (Coming soon)
• Chapter 21 Errors and their Rectification (Coming soon)
• Chapter 22 Accounts from Incomplete Records – Single Entry System (Coming soon)
• Chapter 23 Accounts of Not-for-Profit Organisations (Coming soon)
• Chapter 24 Computerised Accounting System (Coming soon)
• Chapter 25 Introduction to Accounting Information System (Coming soon)

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