From the following information, prepare a Bank Reconciliation Statement showing the balance as per the Cash Book as on 31st March 2016. Pass Book showed a credit balance of ₹21,000... From the following information, prepare a Bank Reconciliation Statement showing the balance as per the Cash Book as on 31st March 2016. Pass Book showed a credit balance of ₹21,000. Cheques amounting to ₹5,500 were deposited, but a cheque of ₹1,500 has not been cleared. Cheques amounting to ₹7,000 were issued, but a cheque for ₹2,400 had not been presented. Bank had given a debit of ₹70 for sundry charges. The Passbook shows a credit of ₹260 for dividend. There is a direct credit in the Passbook for ₹1,600 paid by a client not yet adjusted in the Cash Book. Read more

Steps to Solve

1. Start with the Pass Book Balance

   The Pass Book shows a credit balance of ₹21,000. This is the amount we will adjust to find the Cash Book balance.

2. Adjust for Unpresented Cheques

   Calculate the total amount of cheques issued but not yet presented.

   Cheques issued: ₹7,000
   Cheque not presented: ₹2,400

   The adjustment amount is:

   $$ 7,000 - 2,400 = 4,600 $$

3. Adjust for Unclear Deposits

   Calculate the total amount of cheques deposited but not yet cleared.

   Cheques deposited: ₹5,500
   Cheque not cleared: ₹1,500

   The adjustment amount is:

   $$ 5,500 - 1,500 = 4,000 $$

4. Adjust for Bank Charges

   Take into account the bank charges that have not yet been recorded in the Cash Book.

   Bank charges: ₹70

5. Adjust for Direct Credit

   Include the amount directly credited in the Pass Book that’s not yet in the Cash Book.

   Direct credit amount: ₹1,600

6. Prepare the Final Bank Reconciliation Statement

   Calculate the Cash Book balance by combining all adjustments with the Pass Book balance:

   Using the formula:

   $$ \text{Cash Book balance} = \text{Pass Book balance} + \text{Unpresented Cheques} - \text{Uncleared Deposits} - \text{Bank Charges} + \text{Direct Credit} $$

   Substitute in the values:

   $$ \text{Cash Book balance} = 21,000 + 2,400 - 70 + 1,600 $$

   Final calculation:

   $$ 21,000 + 2,400 - 70 + 1,600 = 25,930 $$

7. Conclude with the final Cash Book balance

   The balance as per the Cash Book on 31st March 2016 is ₹25,930.