Reference no: EM131536514

Question: (a) Smith, a trader, received from his solicitor a cheque for £74 which represented the proceeds of collecting a debt due to him from Jones, a customer, less the solicitor's charges £6. Show the entry in Smith's Journal to record the matter.

(b) By arrangement with Motor Sales Ltd., an old motor lorry, standing in Basset's books at a value of £650, is accepted in part exchange at a value of £600 against the purchase from them, on credit, of a new lorry costing £1,150. Give the necessary entries in the Journal proper of William Basset, a merchant, in respect of this transaction.

(c) A cheque for £50, which had been received by a trader from his customer Paterson in settlement of an account due, was dishonoured and returned by the bank. The trader receives information that Paterson is bankrupt and unlikely to be able to pay any part of the amount due. Show the entries to record these matters in the Company's Journal. Note: in all cases cash is to be journalised.