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Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on 1st March,2018 for 3 months. Pushkar accepted the same and returned it to drawer. Manohar endorsed the bill to Yadav on 1st April,2019 for a debt of equal amount. Yadav discounted it with the bank at 15% p.a on 1st?
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Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on...
Introduction
Manohar's transaction involving a bill of exchange with Pushkar and the subsequent endorsement to Yadav highlights the process of managing debts through bills of exchange and discounts.
Details of the Bill of Exchange
- Bill Amount: ₹20,000
- Date of Drawing: 1st March 2018
- Duration: 3 months
- Maturity Date: 1st June 2018
Pushkar, as the acceptor, is obligated to pay ₹20,000 to Manohar on the maturity date.
Endorsement to Yadav
- Endorsement Date: 1st April 2019
- Debt Amount: ₹20,000
Manohar endorsed the bill to Yadav for an equal debt amount, transferring the right to receive payment at maturity.
Discounting the Bill
- Discounting Date: 1st April 2019
- Bank Discount Rate: 15% p.a.
To determine the discount amount, the following calculation is needed:
1. Time Remaining to Maturity:
- From 1st April 2019 to 1st June 2018 is negative, indicating a misunderstanding in dates. Assuming the correct endorsement date is 1st April 2018.
2. Discount Calculation:
- Time Period: 2 months (from April to June).
- Discount Formula: Principal x Rate x Time
- Calculation:
- Principal = ₹20,000
- Rate = 15% p.a. (or 15/100)
- Time = 2/12 years
The discount amount is calculated, and Yadav will receive the net amount after this discount.
Conclusion
Through this transaction, Yadav can effectively manage his receivables by utilizing the bill of exchange, understanding the discounting process, and the implications of endorsing bills, ensuring a smooth flow of cash in his operations.
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Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on...
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8. GOURU and GAYAANI were friends and in need of funds. On 1st April,2015 Gouru drew a bill for Rs. 2,00,000 for three months on ?Gyani. On 4.4.15 Gouru got the bill discounted at 15% per annum and remitted half of the proceeds to Gyani. On the due date, Gyani could not meet the bill, instead, Gouru accepted Gyani’s bill for Rs.1,20,000 on 4th July,2015 for two months. This was discounted by Gyani at 15% per annum and out this Rs. 19,500 was paid to Gouru after deducting Rs.500 discounting charges. Due to financial crises, Gouru became insolvent and the bill drawn on him was dishonoured and his estate paid 40% Days of grace for discount purposes maybe ignored. (i). Give journal entries and (ii). Prepare Gyani’s Account-in the books of Gouru Related: ICAI Notes 7.1 - Bills of Exchange & Promissory Notes (Part - 4)?

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Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on 1st March,2018 for 3 months. Pushkar accepted the same and returned it to drawer. Manohar endorsed the bill to Yadav on 1st April,2019 for a debt of equal amount. Yadav discounted it with the bank at 15% p.a on 1st?
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Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on 1st March,2018 for 3 months. Pushkar accepted the same and returned it to drawer. Manohar endorsed the bill to Yadav on 1st April,2019 for a debt of equal amount. Yadav discounted it with the bank at 15% p.a on 1st? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on 1st March,2018 for 3 months. Pushkar accepted the same and returned it to drawer. Manohar endorsed the bill to Yadav on 1st April,2019 for a debt of equal amount. Yadav discounted it with the bank at 15% p.a on 1st? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Manohar drew a bill of exchange on Pushkar, his debtor, for ₹20,000 on 1st March,2018 for 3 months. Pushkar accepted the same and returned it to drawer. Manohar endorsed the bill to Yadav on 1st April,2019 for a debt of equal amount. Yadav discounted it with the bank at 15% p.a on 1st?.
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