Q. 4. Bills of Exchange
Question: Ramesh sold goods to Ganesh on credit for ₹ 20,000. Ganesh accepted a bill of ₹ 20,000 for 3 months, drawn by Ramesh on the same date.
On the due date Ganesh dishonoured his acceptance. Then Ganesh approached Ramesh and requested for renewal of the bill.
Ramesh agreed on the condition that Ganesh should pay ₹ 10,000 in cash and accept a new bill for 2 months for the balance amount plus interest ₹ 200.
The new bill was drawn by Ramesh and accepted by Ganesh.
However one month before the due date Ganesh retired his acceptance by paying ₹ 9,900.
Pass necessary Journal Entries in the books of Ramesh.
Solution: In the books of Ramesh
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| (i) |
Ganesh A/c ... Dr. To Sales A/c (Being goods sold on credit) |
20,000 | ||
| 20,000 | ||||
| (ii) |
Bills Receivable A/c ... Dr. To Ganesh A/c (Being bill drawn and accepted for 3 months) |
20,000 | ||
| 20,000 | ||||
| (iii) |
Ganesh A/c ... Dr. To Bills Receivable A/c (Being bill dishonoured on due date) |
20,000 | ||
| 20,000 | ||||
| (iv) |
Cash A/c ... Dr. To Ganesh A/c (Being part payment received) |
10,000 | ||
| 10,000 | ||||
| (v) |
Ganesh A/c ... Dr. To Interest A/c (Being interest due on balance amount) |
200 | ||
| 200 | ||||
| (vi) |
Bills Receivable A/c ... Dr. To Ganesh A/c (Being new bill accepted for balance + interest) |
10,200 | ||
| 10,200 | ||||
| (vii) |
Cash A/c ... Dr. Rebate/Discount A/c ... Dr. To Bills Receivable A/c (Being bill retired one month before due date) |
9,900 300 |
||
| 10,200 |
Q. 5. Dissolution of Partnership Firm (Insolvency)
Question: Mr. Aaba and Mr. Baba are equal partners whose Balance Sheet as on 31st March, 2012 was as under:
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Sundry creditors | 16,000 | Cash in hand | 500 |
| Capital A/c | Stock | 4,500 | |
| Aaba | 2,000 | Debtors | 4,000 |
| Baba | 2,000 | Plant and machinery | 5,000 |
| Furniture | 2,000 | ||
| Land and building | 4,000 | ||
| Total | 20,000 | Total | 20,000 |
Due to weak financial position of the partners the firm is dissolved. Aaba and Baba are not able to contribute anything from their private estate, hence they are declared insolvent.
The assets are realised as follows:
Stock ₹ 3,000, Plant and Machinery ₹ 3,000, Furniture ₹ 1,000, Land and Building ₹ 2,000 and Debtors ₹ 1,000 only.
Realisation expenses amounted to ₹ 500.
You are required to prepare necessary Ledger Accounts to close the books of the firm.
Solution: Ledger Accounts
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Sundry Assets A/c (Transfer): - Stock - Debtors - Plant & Machinery - Furniture - Land & Building |
4,500 4,000 5,000 2,000 4,000 |
By Cash A/c (Assets Realised): - Stock - Plant & Machinery - Furniture - Land & Building - Debtors |
3,000 3,000 1,000 2,000 1,000 |
| To Cash A/c (Realisation Exp) | 500 | By Partners' Capital A/c (Loss): - Aaba (1/2) - Baba (1/2) |
5,000 5,000 |
| Total | 20,000 | Total | 20,000 |
| Particulars | Aaba (₹) | Baba (₹) | Particulars | Aaba (₹) | Baba (₹) |
|---|---|---|---|---|---|
| To Realisation A/c (Loss) | 5,000 | 5,000 | By Balance b/d | 2,000 | 2,000 |
| By Deficiency A/c (Balancing Fig) | 3,000 | 3,000 | |||
| Total | 5,000 | 5,000 | Total | 5,000 | 5,000 |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 500 | By Realisation A/c (Exp) | 500 |
| To Realisation A/c (Assets Realised) | 10,000 | By Sundry Creditors A/c (Final Payment) | 10,000 |
| Total | 10,500 | Total | 10,500 |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Cash A/c (Paid) | 10,000 | By Balance b/d | 16,000 |
| To Deficiency A/c (Unpaid Balance) | 6,000 | ||
| Total | 16,000 | Total | 16,000 |
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Aaba's Capital A/c | 3,000 | By Sundry Creditors A/c | 6,000 |
| To Baba's Capital A/c | 3,000 | ||
| Total | 6,000 | Total | 6,000 |
OR - Issue of Debentures
Question: Joshi - Patil Ltd. issued 2,000, 10% debentures of ₹ 100 each, payable ₹ 20 on application and the balance on allotment.
Company received applications for 2,500 debentures, out of which applications for 2,000 were alloted fully and remaining applications were rejected and the money refunded.
Journalise the above transactions, assuming that all the sums were received.
Solution: Journal Entries in the books of Joshi - Patil Ltd.
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| (i) |
Bank A/c ... Dr. To Debenture Application A/c (Being application money received on 2,500 debentures @ ₹ 20 each) |
50,000 | ||
| 50,000 | ||||
| (ii) |
Debenture Application A/c ... Dr. To 10% Debentures A/c (Being application money transferred to Debentures A/c for 2,000 debentures) To Bank A/c (Being refund of excess application money on 500 debentures) |
50,000 | 40,000 10,000 |
|
| (iii) |
Debenture Allotment A/c ... Dr. To 10% Debentures A/c (Being allotment money due on 2,000 debentures @ ₹ 80 each) |
1,60,000 | ||
| 1,60,000 | ||||
| (iv) |
Bank A/c ... Dr. To Debenture Allotment A/c (Being allotment money received in full) |
1,60,000 | ||
| 1,60,000 |
Q. 6. Not for Profit Concern
Note: The solution for Question 6 (Sevagiri Hospital, Satara) cannot be provided as the full question data (Receipts and Payments Account and adjustments) is not available in the provided source images.
Provided Data (Opening Balance Sheet):
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capital fund | 10,00,000 | Cash in hand | 6,000 |
| Outstanding salaries | 22,000 | Cash at bank | 30,000 |
| Land and building | 8,00,000 |
