1. Answer the following Questions.

(5 marks)
i. What is bill of exchange?
ii. What do you mean by goodwill?
iii. What is do you mean by grace days?
iv. What is due date?
v. Who is acceptance of the bill?
2. Drawer : Abhijit Patil, Vikram nagar, Patna. (5 marks)
Drawee : Tejas Kapare, Kothrud, Pune.
Payee : Amey Patki, Nagpur.
Amount : Rs. 9500
Period : 80 days
Term : After sight
Date of Bill Drawn : 1st June 2008
Date of Acceptance : 11th June 2008
Accepted bill for Rs. : 9000 only.
3. Maruti and Dinesh are carrying on a business in partnership for last 5 years. Goodwill
of the firm is to be valued at 2 years purchase of last 5 years’ average profit. The
profits and losses were as under. (5 marks)

1. Answer the following Questions. (5 marks)

i. What is inland bill?
ii. What is foreign bill?
iii. What is noting charges?
iv. What is protesting?
v. What is Draft?
2. Drawer : Namdev Tukaram, Paithan.
Drawee : Nivruti Sopan, Dehu.
Payee : Vitthal Pandurang, Pandharpur.
Amount : Rs. 5,111
Period : 3 months
Date of Bill : 17th August, 1995
Date of Acceptance : 20th August, 1995

3. The books of a business showed that the capital employed on 31st December, 1992
was Rs.1, 00,000/-. Profits for the last five years are 1988, 1989, 1990, 1991 & 1992
were Rs, 60,000, Rs, 55,000, Rs, 75,000, Rs, 85,000 & Rs, 65,000 respectively.
Goodwill is valued at 2 years purchase of the Super profit of the business. N.R.R. is
10%.
 Year Amount
(Rs.)

2000 – 19000(Pro
2001 fit)

2001 – 33000(Pro
2002 fit)

2002 – 18000(Los
2003 s)

2003 – 14000(Pro
2004 fit)

2004 – 32000(Pro
2005 fit)

Calculate the value of goodwill of the firm.

1. Priti owed Manisha Rs. 9000. Priti accepted the bill drawn by Manisha for the amount
at 4 months. Manisha endorsed the same bill to Shital. Before the due date, Priti
approached Manisha for renewal of the bill. Manisha agreed on the condition that Rs.
3,000 be paid immediately together with interest on the remaining amount at 8%
p.a. for 3 months and Priti should accept a new bill. These arrangements were carried
through. However, before due date Priti became Insolvent and only 50% of the
amount could be recovered from her estate. (12 marks)
2. Journalise the following transactions in the books of Motilal.
i. Bhavna informed Motilal that Jyoti’s acceptance for Rs. 3,600 endorsed to
Bhavna has been dishonoured and noting charges have been Rs. 150.
ii. Anil renews his acceptance to Motilal for Rs. 3,400 by paying Rs. 900 in cash
and accepting a new bill for the balance plus interest at 8% p.a. for 3 months.
iii. Prabhakar retired his acceptance to Motilal for Rs. 4,000 by paying Rs. 3850 in
cash.
iv. Bank informed Motilal that Arun’s acceptance of Rs. 7000 which was
discounted with bank has been dishonoured with noting charges Rs. 100.

1. On 1st January, 1982 Shri Jameersheth of Jalgaon sold goods to Shri Nanchand of
Nanded for Rs. 80,000. On the same date Shri Jameersheth drew a bill on Shri
Nanchand for the same amount for three months. Shri Nanchand accepted the bill
and returned the same to Shri Jameersheth on 4th January, 1982. Shri Jameersheth
discounted the bill with the banker at 10 % p.a. On the due date bank informed that
the bill was dishonoured and Shri Nanchand requested Shri Jameersheth to accept
Rs. 40000 immediately and draw upon him the new bill for the remaining amount for
two months together and interest at 12% p.a. Shri Jameersheth agreed and the
 second bill was duly honoured. Pass the necessary Journal entries in the books of Shri
Jameersheth of Jalgaon and show Shri Jameersheth’s account in the books of Shri Nanchand of
Nagpur.(12 marks)
2. Journalise the following transactions in the books of Rahul.
a. Pradeep informed Rahul that, Vijay’s acceptance for Rs. 1,000 endorsed to
Pradeep has been dishonoured. Noting charges amounted to Rs. 50.
b. Nilesh renews his acceptance to Rahul for Rs. 600 by paying Rs. 200 in cash
and accepting a fresh bill for balance plus interest at 12% p.a. for 3 months.
c. Prashant’s acceptance to Rahul for Rs. 3,000 retired one month before due
date at a discount of 12% p.a.
d. Bank informs Rahul as to the dishonour of Aviraj’s acceptance for Rs. 1,000
to Rahul, discounted with the bank. Noting charges are Rs. 20.