Prepare a bank reconciliation statement based on the given information.

Steps to Solve

1. Identify the cash book and bank balance The cash book shows a debit balance of Rs. 25,000, and the bank passbook shows a balance of Rs. 26,000.

2. Adjust for cheques sent for collection Cheques totaling Rs. 5,000 were sent to the bank, but only Rs. 2,000 were credited in the passbook. Thus, Rs. 3,000 (Rs. 5,000 - Rs. 2,000) should be added to the bank balance.

3. Adjust for cheques omitted in cash book Cheques of Rs. 1,500 were drawn but not recorded in the cash book. This amount should be deducted from the cash book balance.

4. Adjust for direct deposit not recorded in cash book A direct deposit of Rs. 3,500 was made, which was not recorded in the cash book. This amount should be added to the cash book balance.

5. Adjust for service charges Service charges of Rs. 1,000 were deducted by the bank but not recorded in the cash book, so this amount should be deducted from the bank balance.

6. Adjust for interest earned An interest of Rs. 500 was credited in the passbook but not recorded in the cash book. This amount should be added to the cash book balance.

7. Adjust for undercasting The receipts side of the bank column in the cash book was undercast by Rs. 2,500. This means an additional Rs. 2,500 should be added to the cash book balance.

8. Calculate adjusted balances Calculate the adjusted bank balance and cash book balance using the adjustments noted above.

9. Prepare the bank reconciliation statement Combine all adjusted values to finalize the bank reconciliation statement.