Kumar find that the bank balance shown by his cash book on December 31, 2017 is ₹ 90,600 (Credit) but the passbook shows a difference due to the following reason: A cheque (post dated) for ₹ 1,000 has been debited in the bank column of the cash book but not presented for payment. Also, a cheque for ₹ 8,000 drawn in favour of Manohar has not yet been presented for payment. Cheques totaling ₹ 1,500 deposited in the bank have not yet been collected and cheque for ₹ 5,000 has been dishonoured.
Bank Reconciliation Statement of Kumar as on December 31, 2017
| Particulars | Amount (₹) | Amount (₹) |
|---|---|---|
| Overdraft as per Cash Book (Credit Balance) | 90,600 | |
| Add: Cheque dishonoured (Not recorded in Cash Book) | 5,000 | |
| Add: Cheques deposited but not collected | 1,500 | |
| Add: Cheque (post-dated) wrongly debited in Cash Book | 1,000 | 7,500 |
| 98,100 | ||
| Less: Cheque issued to Manohar not presented for payment | (8,000) | |
| Overdraft as per Pass Book | 90,100 |
Working Notes:
- The starting balance is an Overdraft (Credit balance in Cash Book).
- Post-dated cheque: It was debited in the cash book but not presented. Since it is post-dated, the entry in the cash book is considered premature or erroneous for the reconciliation date, requiring adjustment.
- Dishonoured Cheque: Reduces the bank balance but hasn't been adjusted in the Cash Book yet, so it is added to the overdraft.
- Unpresented Cheque: Reduces the Cash Book balance but not the Pass Book, so it is deducted from the overdraft.
- Uncollected Cheques: Increases the Cash Book balance but not the Pass Book, so it is added to the overdraft.
Explanation
The question requires preparing a Bank Reconciliation Statement starting from the Cash Book credit balance (Overdraft). The provided context confirms the final answer is an Overdraft as per Pass Book of ₹ 90,100. To arrive at this figure from the starting balance of ₹ 90,600, the post-dated cheque (₹ 1,000) must be added back (reversing the debit), along with the dishonoured cheque (₹ 5,000) and uncollected cheques (₹ 1,500). The unpresented cheque for Manohar (₹ 8,000) is subtracted. This aligns with the standard treatment where unpresented cheques reduce the overdraft balance while uncollected deposits and dishonoured cheques increase it.
Solution Steps
Step 1: Identify the starting balance. Cash Book Credit Balance (Overdraft) = ₹ 90,600.
Step 2: Adjust for the Cheque dishonoured (₹ 5,000). Since it reduces the bank balance but isn't in the Cash Book, Add to the overdraft. (90,600 + 5,000 = 95,600).
Step 3: Adjust for Cheques deposited but not collected (₹ 1,500). The Cash Book shows a higher balance (less overdraft) than the bank. To match the bank, Add to the overdraft. (95,600 + 1,500 = 97,100).
Step 4: Adjust for the Post-dated cheque debited in Cash Book (₹ 1,000). This entry effectively reduced the overdraft in the Cash Book prematurely. To reconcile, we must Add it back to the overdraft. (97,100 + 1,000 = 98,100).
Step 5: Adjust for Cheque issued to Manohar not presented (₹ 8,000). The Cash Book shows a lower balance (higher overdraft) than the bank. To match the bank, Subtract from the overdraft. (98,100 - 8,000 = 90,100).
Step 6: Arrive at the final balance. Overdraft as per Pass Book = ₹ 90,100.