6. On 30th September, 2019, the bank account of Neel, according to the bank column
of the Cash- Book, was overdrawn to the extent of 8,124. On the same date the
bank statement showed a debit balance of 7 41,516 in favour of Neel. An
examination of the Cash Book and Bank Statement reveals the following:
1. A cheque for 26,28,000 deposited on 29th September, 2019 was credited
by the bank only on 3rd October, 2019
2. A payment by cheque for 32,000 has been entered twice in the Cash Book.
3. On 29th September, 2019, the bank credited an amount of * 2,34,800
received from a customer of Neel, but the advice was not received by Neel
until 1st October, 2019.
4. Bank charges amounting to 1,160 had not been entered in the Cash Book.
5. On 6th September, 2019, the bank credited * 40,000 to Neel in error.
6. A bill of exchange for * 2,80,000 was discounted by Neel with his bank. This
bill was dishonoured on 28th September, 2019 but no entry had been made in
the books of Neel
Answers
5.
On 30th September, 2019, the bank account of Neel, according to the bank column of the Cash- Book, was overdrawn to the extent of `8,124. On the same date the bank statement showed a debit balance of `41,516 in favour of Neel. An examination of the Cash Book and Bank Statement reveals the following: 1. A cheque for `26,28,000 deposited on 29th September, 2019 was credited by the bank only on 3rd October, 2019 2. A payment by cheque for `32,000 has been entered twice in the Cash Book. 3. On 29th September, 2019, the bank credited an amount of `2,34,800 received from a customer of Neel, but the advice was not received by Neel until 1st October, 2019. 4. Bank charges amounting to `1,160 had not been entered in the Cash Book. 5. On 6th September, 2019, the bank credited `40,000 to Neel in error. 6. A bill of exchange for `2,80,000 was discounted by Neel with his bank. This bill was dishonoured on 28th September, 2019 but no entry had been made in the books of Neel. 7. Cheques issued upto 30th September, 2019 but not presented for payment upto that date totalled `26,52,000. You are required: (a) to show the appropriate rectifications required in the Cash Book of Neel, to arrive at the correct balance on 30th September, 2019 and (b) to prepare a bank reconciliation statement as on that date. Valuation of Inventories 6.Stock taking of XYZ Stores for the year ended 31stMarch, 2019 was completed by 10thApril, 2019, the valuation of which showed a stock figure of `1,67,500 at cost as on the completion date. After the end of the accounting year and till the date of completion of stock taking, sales for the next year were made for ` 6,875, profit margin being 33.33 percent on cost. Purchases for the next year included in the stock amounted to `9,000 at cost less trade discount 10 percent. During this period, goods were added to stock of the mark-up price of `300 in respect of sales returns. After stock taking it was found that there were certain very old slow moving items costing `1,125 which should be taken at `525 to ensure disposal to an interested customer. Due to heavy floods, certain goods costing `1,550 were received from the supplier beyond the delivery date of customer. As a result, the customer refused to take delivery and net realizable value of the goods was estimated to be `1,250 on 31stMarch, 2019.