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Mr. Sobby draws a two months bill of Rs. 50,000 on Mr. Dobby. Dobby accepts it on 01- 02-16. Sobby discounts it on 15-02-16 at 18% per annum. On the due date of bill Dobby became insolvent and 50 paise in a rupee could only be recovered from his estate. Calculate the amount of bad debt
  • a)
    Rs. 25,000
  • b)
    Rs. 18,874
  • c)
    Rs. 23,374
  • d)
    Rs. 27,300
Correct answer is option 'A'. Can you explain this answer?
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Mr. Sobbydrawsa two months bill of Rs. 50,000 on Mr. Dobby. Dobby acce...
Calculation of bad debt on bill discounted

Given data:
- Two months bill of Rs. 50,000 drawn by Mr. Sobby on Mr. Dobby
- Accepted by Mr. Dobby on 01-02-16
- Discounted by Mr. Sobby on 15-02-16 at 18% per annum
- Mr. Dobby became insolvent on the due date of the bill
- Only 50 paise in a rupee could be recovered from his estate

To calculate the bad debt on the discounted bill, we need to follow these steps:

Step 1: Calculate the due date of the bill
The due date of the bill will be two months from the date of acceptance, i.e., 01-04-16.

Step 2: Calculate the discount received by Mr. Sobby
The discount received by Mr. Sobby can be calculated using the following formula:
Discount = Bill Amount * Rate of Interest * Time / 100
= 50,000 * 18 * 45 / (365 * 100) [Time = 45 days, i.e. from 15-02-16 to 01-04-16]
= Rs. 1,763

Step 3: Calculate the amount received by Mr. Sobby
The amount received by Mr. Sobby can be calculated as:
Amount Received = Bill Amount - Discount
= Rs. 50,000 - Rs. 1,763
= Rs. 48,237

Step 4: Calculate the bad debt
The bad debt can be calculated as:
Bad Debt = Bill Amount - Amount Recovered
= Rs. 50,000 - (50/100 * Rs. 48,237)
= Rs. 25,000

Therefore, the amount of bad debt on the discounted bill is Rs. 25,000.
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Mr. Sobbydrawsa two months bill of Rs. 50,000 on Mr. Dobby. Dobby acce...
1 rs for 50 paisa that means he insolvent for 50% that why
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Mr. Sobbydrawsa two months bill of Rs. 50,000 on Mr. Dobby. Dobby accepts it on 01- 02-16. Sobby discounts it on 15-02-16 at 18% per annum. On the due date of bill Dobby became insolvent and 50 paise in a rupee could only be recovered from his estate. Calculate the amount of bad debta)Rs. 25,000b)Rs. 18,874c)Rs. 23,374d)Rs. 27,300Correct answer is option 'A'. Can you explain this answer?
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Mr. Sobbydrawsa two months bill of Rs. 50,000 on Mr. Dobby. Dobby accepts it on 01- 02-16. Sobby discounts it on 15-02-16 at 18% per annum. On the due date of bill Dobby became insolvent and 50 paise in a rupee could only be recovered from his estate. Calculate the amount of bad debta)Rs. 25,000b)Rs. 18,874c)Rs. 23,374d)Rs. 27,300Correct answer is option 'A'. Can you explain this answer? 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 Mr. Sobbydrawsa two months bill of Rs. 50,000 on Mr. Dobby. Dobby accepts it on 01- 02-16. Sobby discounts it on 15-02-16 at 18% per annum. On the due date of bill Dobby became insolvent and 50 paise in a rupee could only be recovered from his estate. Calculate the amount of bad debta)Rs. 25,000b)Rs. 18,874c)Rs. 23,374d)Rs. 27,300Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr. Sobbydrawsa two months bill of Rs. 50,000 on Mr. Dobby. Dobby accepts it on 01- 02-16. Sobby discounts it on 15-02-16 at 18% per annum. On the due date of bill Dobby became insolvent and 50 paise in a rupee could only be recovered from his estate. Calculate the amount of bad debta)Rs. 25,000b)Rs. 18,874c)Rs. 23,374d)Rs. 27,300Correct answer is option 'A'. Can you explain this answer?.
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