Bank balance of ₹ 40,000 showed by the cash book of Atul on December 31, 2016. It was found that three cheques of ₹ 2,000, ₹ 5,000 and ₹ 8,000 deposited during the month of December were not credited in the passbook till January 02, 2017. Two cheques of ₹ 7,000 and ₹ 8,000 issued on December 28, were not presented for payment till January 03, 2017. In addition to it bank had credited Atul for ₹ 325 as interest and had debited him with ₹ 50 as bank charges for which there were no corresponding entries in the cash book. Prepare a bank reconciliation statement as on December 31, 2016.
Bank Reconciliation Statement of Atul as on December 31, 2016
| Particulars | Plus Items (₹) | Minus Items (₹) |
|---|---|---|
| Balance as per Cash Book | 40,000 | |
| Add: Cheques issued but not presented for payment<br>(₹ 7,000 + ₹ 8,000) | 15,000 | |
| Add: Interest credited by bank | 325 | |
| Less: Cheques deposited but not credited<br>(₹ 2,000 + ₹ 5,000 + ₹ 8,000) | 15,000 | |
| Less: Bank charges debited by bank | 50 | |
| Balance as per Pass Book | 40,275 | |
| Total | 55,325 | 55,325 |
Explanation
The Bank Reconciliation Statement starts with the balance as per the Cash Book (₹ 40,000). Cheques issued but not presented (₹ 15,000) and interest credited by the bank (₹ 325) are added because they increase the passbook balance relative to the cash book. Cheques deposited but not credited (₹ 15,000) and bank charges (₹ 50) are subtracted because they decrease the passbook balance relative to the cash book. The final calculated balance as per the Pass Book is ₹ 40,275.
Solution Steps
Step 1: Identify the starting balance: Balance as per Cash Book (Cr.) = ₹ 40,000.
Step 2: Calculate total cheques issued but not presented: ₹ 7,000 + ₹ 8,000 = ₹ 15,000. This is added to the balance.
Step 3: Calculate total cheques deposited but not credited: ₹ 2,000 + ₹ 5,000 + ₹ 8,000 = ₹ 15,000. This is deducted from the balance.
Step 4: Adjust for unrecorded items in Cash Book: Add ₹ 325 (Interest) and Deduct ₹ 50 (Bank charges).
Step 5: Compute the final balance: 40,000 + 15,000 + 325 - 15,000 - 50 = ₹ 40,275.