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Compute the correct cash book balance
Problem
XYZ Enterprise Company has a pass book balance of Rs. 58700/- and cash book balance of Rs.68500/- as on 31st march 2014. Compute the correct cash book balance for the transactions and prepare a reconciliation statement.
The transactions are as follows −
- Cheque issued (personal account) of enterprise debited to firm's account of Rs.3500/-
- Cheque deposited and yet to collect by bank of Rs.1900/-
- Cheque deposited and collected from bank and not recorded in cash books of Rs.3800/-
- Customer cheque dishonored Rs.1800/-
- Bank direct payments of Rs.4200/-
- Cheque issued and yet to present for payments of Rs.12000/-
- Customer deposited Rs.2000/- into bank
- Discounted bill is dishonored when presented on maturity Rs.7800/-
- Bank charges Rs.500/-
- Dividends and interest (collection) by bank Rs.1900/-
- Corrected bank balance (cash book) Rs. 61900/-
Solution
Computation of corrected bank balance as per cash book is as follows −
| Items (to be added) | Items (to be subtracted) | |
|---|---|---|
| Direct deposits Direct collections Cheques collected but yet to record in cash book Balance (cash book) | 2000 1900 3800 68500 | |
| Cheque dishonored Discounted bill dishonored Bank charges Direct payments Corrected bank balance (cash book) | 1800 7800 500 4200 61900 | |
| 76200 | 76200 |
The bank reconciliation statement is prepared as follows −
| Bank reconciliation statement As on 31st march, 2014 | ||
|---|---|---|
| Items (to be added) | Items (to be subtracted) | |
| Deposited cheque yet to collect Wrongly debited cheque Balance (cash book) Direct deposits | 1900 3500 68500 | |
| Issued cheque yet to present Corrected bank balance (cash book) | 12000 61900 | |
| 73900 | 73900 | |
Updated on 13-Jul-2021 12:34:53
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