A draws a bill of Rs. 50,000 and B accepts it. After this, B becomes insolvent and only 40 paisa in a rupee could be recovered. What is the amount that can be recovered?

Rs 20,000

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Rs 30,000

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Rs 35,000

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None of the above

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Solution

The correct option is A
Rs 20,000

Rs $50000 * 40 %$ = Rs 20,000

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Similar questions

Q. X sold goods worth Rs 1,50,000 to Y. Y immediately accepted a bill on 1st Nov payable after 2 months. X discounted this bill @ 18% p.a. on 15th Nov. On the due date , Y failed to discharge the bill. Later on Y became insolvent and 50 paise in a rupee is recovered from Y's estate. How much amount of bad debt will be recorded in the books of X?

Q. On 1.1.13 X drew a bill on Y for 1,50,000. At maturity, the bill returned dishonoured as Y become insolvent and 40 paise per rupee is recovered from his estate. The amount recovered is ____________.

Q. Raja made sales goods worth Rs. 40,000 to Pradhan and received a part payment of Rs. 10,000. On the same date, Raju drew on Pradhan a three month's bill for Rs. 30,000, received the acceptance on the bill and sent the bill to the bank for collection immediately.
However, on the due date, the bill was dishonoured due to Pradhan's insolvency and only 50% of the amount due could be recovered from his private estate as the first and final dividend.
Give Journal Entries Pradhan's Account in the books Raja.

PRACTICAL PROBLEMS

On 1^st June, 2010 Narayan draws a bill for Rs 50,000 on Chunilal for 4 months period.
The bill is duly accepted and returned to Narayan. One month after the date. Narayan discounted the bill with bank @ 18% p.a.

Before due date Chunilal dishonoured his acceptance. Bank paid noting charges Rs 1,125. Narayan requested to renew the bill for further period of 2 months. Narayan agreed he took the bill back from bank and received new acceptance for 40% amount of the bill with full amount of noting charges and cheque for 60% balance plus interest @ 12% p.a.

Before the due date Chunilal declared insolvent and 30% of the amount due could be recovered from his private estate.

Write Journal of Narayan and Chunilal for the above bill transactions.

Q. What Journal entries would be passed for following unrecorded liabilities on the dissolution of a firm partners A and B:
(a) There was a contingent liability in respect of bills discounted but not matured of Rs. 18,500. An acceptor of one bill of Rs. 2,500 became insolvent and fifty paise in a rupee was recovered. The liability of the firm on accout of this bill discounted and dishonoured has not so far been recorded.
(b) There was a contingent liability in respect of claim for damages for Rs. 75,000, such liability was settled for Rs. 50,000, and paid by the partner A.
(c) Firm will have to pay Rs. 10,000 as compensation to an injured employee, which was a contingent liability not accepted by firm.
(d) Rs. 5,000 for damages claimed by a customer has been disputed by the firm. It was settled at 70% by a compromise between the custorner and the firm.

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A draws a bill of Rs. 50,000 and B accepts it. After this, B becomes insolvent and only 40 paisa in a rupee could be recovered. What is the amount that can be recovered?

The correct option is A Rs 20,000 Rs 50000∗40% = Rs 20,000

The correct option is A
Rs 20,000

Rs $50000 * 40 %$ = Rs 20,000