Mr.

A owed T
6 4,000 on 1st January, 2004 to Mr. X. The following transac-
ons took place between them. It is agreed between the parties that interest
@106 p.a. is to be calculated on all transactions.

15 January, 2004 Mr. X sold goods to Mr. A 2,230

29 January, 2004 Mr. X 1,200
bought goods from Mr. A
10 February, 2004 Mr. A
paid cash to Mr. X 1,000
13 March, 2004 Mr. A accepted a bill drawn by Mr. X for one month 2,000
They agree to settle their complete accounts by one single payment on 15th
March, 2004. Prepare Mr. A in Account Current with Mr. X and ascertain the
amount to be paid.
Ignore days of grace.
Solution
Mr. A in Account Current with Mr. X from 1.1.2004 to 15.3.2004
200000000080

Date Particulars Amount Days Product Date Particulars Amount Days Product
2004 2004
Jan 01 To Balance b/d 4,000 75 3,00,000 Jan 29 By Purchase a/c 1,200 46 55,200
Jan 15 To Sales a/c 2,230 60 1,33,800 Feb. 10 By Cash a/c 1,000 34 34,000
Mar.13 To Red Ink product a/c 29 58,000 Mar.13 By Bills Receivable a/c 2,000
(due date 13.4)
(2,000 x 29) (see note)
Mar. To Interest a/e 110 Mar.15 By Balances of Product 4,02,600
15 |(Dr.)
19.10 ACCOUNT CURRENT

Date Particulars Amount Days Product Date Particulars Amount Days Product
Mar.15 By Balancec/d 2,140
T4,02,600x10x1\ (amount tobe paid by'A)
100X 366

6,340 4,91,800 6,340 | 4,91,800

Amount to be paid by A to X on 15.3.2004 T 2,140
Note: Redink interestproduct(contraproduct) are from 16.3.2004 to 13.4.2004.