From the following information, prepare bank reconciliation statement to find out the bank statement balance as on 31st December, 2017.
| Particulars | ₹ |
|---|---|
| 1. Balance as per cash book | 15,000 |
| 2. Cheques deposited but not yet credited | 1,000 |
| 3. Cheque issued and entered in the cash book before 31st December 2017 but not presented for payment until that date | 1,500 |
| 4. Dividend directly received by bank | 200 |
| 5. Direct payment made by bank for rent | 1,000 |
| 6. Locker rent charged by the bank not recorded in cash book | 1,200 |
| 7. Wrong debit given by the bank on 30th December 2017 | 500 |
| 8. A payment made through net banking has been entered twice in the cash book | 300 |
OR
The following errors were located before the preparation of the trial balance. Rectify them.
- Paid ₹900 to Arangan were wrongly debited to Angappan's account.
- Sale of furniture for ₹730 was credited to sales account.
- Purchase of goods from Bagya for ₹2,100 was wrongly passed through sales book.
- Wages ₹1,000 paid on erection of machinery were debited to wages account.
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Start your 14-day free trial to unlock the full solution →(a) Pass book (bank statement) balance ₹13,300. (b) OR — four rectification entries correcting the wrong debit, wrong credit, wrong book and a capital-vs-revenue misposting.
(a) Bank Reconciliation Statement as on 31st December 2017
| Particulars | + ₹ | − ₹ |
|---|---|---|
| Balance as per cash book | 15,000 | |
| Add: Cheque issued but not yet presented | 1,500 | |
| Add: Dividend directly received by bank | 200 | |
| Add: Net-banking payment entered twice in cash book | 300 | |
| Less: Cheques deposited but not yet credited | 1,000 | |
| Less: Direct payment (rent) made by bank | 1,000 | |
| Less: Locker rent charged by bank (not in cash book) | 1,200 | |
| Less: Wrong debit given by the bank | 500 | |
| Sub-totals | 17,000 | 3,700 |
| Balance as per pass book (bank statement) | 13,300 |
Balance as per pass book = 17,000 − 3,700 = ₹13,300.
Why each item: unpresented cheques and the direct dividend raise the bank balance (add); a payment recorded twice in the cash book means the cash book is ₹300 lower than the bank, so add ₹300. Cheques not yet credited, the bank's direct rent payment, locker rent and the wrong debit all reduce the bank balance (subtract).
(b) OR — Rectifying Entries (errors found before the trial balance)
| # | Particulars | L.F. | Dr ₹ | Cr ₹ |
|---|---|---|---|---|
| (a) | Arangan A/c ..... Dr | 900 | ||
| To Angappan A/c | 900 | |||
| (₹900 paid to Arangan wrongly debited to Angappan, now corrected) | ||||
| (b) | Sales A/c ..... Dr | 730 |
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