Overdraft shown by the passbook of Mr. Murli is ₹ 20,000. Prepare bank reconciliation statement on dated March 31, 2017. (i) Bank charges debited as per passbook ₹ 500. (ii) Cheques recorded in the cash book but not sent to the bank for collection ₹ 2,500. (iii) Received a payment directly from customer ₹ 4,600. (iv) Cheque issued but not presented for payment ₹ 6,980. (v) Interest credited by the bank ₹ 100. (vi) LIC paid by bank ₹ 2,500. (vii) Cheques deposited with the bank but not collected ₹ 3,500.
Overdraft as per Cash Book ₹ 22,680
Explanation
To prepare the Bank Reconciliation Statement starting with the Overdraft as per Passbook (Credit balance), we adjust for items that cause the difference between the Cash Book and Passbook balances. Items that increase the overdraft in the Passbook but are not in the Cash Book (Bank charges, LIC payment) are deducted to arrive at the Cash Book balance. Items that decrease the Passbook overdraft but are not in the Cash Book (Direct deposits, Interest) are added. Furthermore, transactions recorded in the Cash Book that reduce the liability but are not yet in the Passbook (Cheques recorded but not sent, Cheques deposited but not collected) are deducted, while those that increase the liability (Cheques issued but not presented) are added.
Solution Steps
Bank Reconciliation Statement of Mr. Murli as on March 31, 2017
| Particulars | Amount (₹) | Amount (₹) |
| :--- | :--- | :--- |
| Overdraft as per Passbook | | 20,000 |
| Add: | | |
| (iv) Cheque issued but not presented for payment | 6,980 | |
| (iii) Received a payment directly from customer | 4,600 | |
| (v) Interest credited by the bank | 100 | 11,680 |
| | | 31,680 |
| Less: | | |
| (i) Bank charges debited as per passbook | 500 | |
| (ii) Cheques recorded in the cash book but not sent to the bank for collection | 2,500 | |
| (vi) LIC paid by bank | 2,500 | |
| (vii) Cheques deposited with the bank but not collected | 3,500 | (9,000) |
| Overdraft as per Cash Book | | 22,680 |