Question

The Cash-book of M/s ABC shows Rs. 27,570 as the balance at Bank as on 31st March, 2017. But

this does not agree with balance as per the Bank Statement. On scrutiny following discrepancies

were found:

i. Subsidy Rs. 10,250 received from the government directly by the bank, but not advised to the

company.

ii. On 15th March, 2017 the payments side of the Cash-book was under cast by Rs. 350.

iii. On 20th March, 2017 the debit balance of Rs. 2,156 as on the previous day, was brought forward

as credit balance in Cash-book.

iv. A customer of the M/s ABC, who received a cash discount of 5% on his account of Rs. 2,000,

paid to M/s ABC a cheque on 24th March, 2017. The cashier erroneously entered the gross

amount in the Cash-Book.

v. On 10th March, 2017 a bill for Rs. 5,700 was discounted from the bank, entered in Cash-book, but

proceeds credited in Bank Statement amounted to Rs. 5,500 only.vi. A cheque issued amounting to Rs. 1,725 returned marked ‘out of date’. No entry made in

Cashbook.

vii. Insurance premium Rs. 756 paid directly by bank under a standing order. No entry made in

cashbook.

viii. A bill receivable for Rs. 1,530 discounted for Rs. 1,500 with the bank had been dishonoured on

30th March, 2017, but advice was received on 1st April, 2017.

ix. Bank recorded a Cash deposit of Rs. 1,550 as Rs. 1,505.

Prepare Bank Reconciliation Statement on 31st March, 2017.​

Answer 1

Answer:

passbook favorable balance will be 40876

Answer 2

We have made the bank Reconciliation Statement as required by the question and the statement is as under:

Favorable balance as per cash book                                                       $27,570$

ADD:

1. Subsidy received, recorded in Bank book only                 $10,250$

2. Debit balance brought forward as the credit balance       $4,312$

3. Cheque issued, returned back                                             $1,725$       $16,287$

                                                                                                               _______

                                                                                                                  $43,857$

LESS:

1. Payment side of Cash Book undercast                                  $350$

2. Wrong amount entered in Cash Book                                  $100$

3. Less amount credited in Bank Book                                    $200$

4. Insurance premium paid by bank directly                             $756$

5. Bills receivable dishonored                                                    $1,530$

6. Wrong amount recorded by the bank                                    $45$           $2,981$

                                                                                                               _______

Favorable balance as per Bankbook                                                        $40876$

PROJECT CODE: #SPJ3