In past, we have covered Bank Reconciliation Statement in great depth. Now, it is the time to practice this topic well so to avoid any pitfall in the examination hall.
Problem:
Fadi Chemical is a medium sized entity that provides various types of chemicals to the soap manufacturing companies in the West part of Europe. Following information is available as at 30th June, 2013:
| S. No | Particulars | $ |
| 1 | Balance as per the cash book (debit) | 14,000 |
| 2 | Bank balance as per bank statement (credit) | 10,310 |
| 3 | Cheque issued to vendor but presented for payment after 30th June | 2,000 |
| 4 | Three cheques were issued by the accountant for $ 1,000, $ 2,000 & $ 3,000 respectively. However, the Cheque for $ 2,000 was presented for payment on 3rd July. | |
| 5 | Cheque issued by the junior accountant but not recorded in cash book | 1,500 |
| 6 | Cheque deposited on 29th June but credited by the bank after 30th June | 500 |
| 7 | Three cheques were deposited by the accountant for $ 2,000, $ 2,400 & $ 3,200 respectively but the Cheque for $ 3,200 was credited on 2nd July. | |
| 8 | Accountant deposited into bank but it got unrecorded in cash book. | 2,000 |
| 9 | Debit side of the cash book was over casted by | |
| 10 | Credit side of the cash book was under casted by | |
| 11 | Bank credit the Fadi account for interest $ 300 and debited for interest $ 100. These transactions have not been recorded in cash book. | |
| 12 | Bank collected dividend on behalf of the Fadi not recorded in cash book | 2,000 |
| 13 | A customer directly deposited money into Fadi bank account that has not been recorded in cash book | 1,000 |
| 14 | Dishonored Cheque | 2,000 |
| 15 | The bank met a bill payable of the Fadi for $ 3,000 on 30th June, under advice to the firm on 2nd July. | |
| 16 | Bank charges $ 10 for new Cheque book issuance was entered twice in the cash book. | |
| 17 | A cheque for $ 100 drawn by Ahad Chemicals had been charged erroneously to Fadi Chemical’s account in March 2013. |
Required
You are required to:
Calculate the adjusting balance.
Prepare the bank reconciliation statement as on 30 June 2013 to arrive the balance as per pass book.
Solution
Fadi Chemical
Adjusted Balance Computation
As on 30th June, 2013
| Particulars | Cash Book | Pass Book |
| Balance as per | 14,000 | 10,310 |
| Less: un-presented cheques | (2,000) | |
| Less: un-presented cheques | (2,000) | |
| Less: cheque issued but not recorded in cash book by accountant | (1,500) | |
| Add: cheque not cleared | 500 | |
| Add: cheque not cleared | 3,200 | |
| Add: cheque deposited into bank but not recorded in cash book | 2,000 | |
| Less: debit side of cash book over casted | (1,000) | |
| Less: debit side of cash book under casted | (1,600) | |
| Add: interest income | 300 | |
| Less: interest expense | (100) | |
| Add: dividend income not recorded in cash book | 2,000 | |
| Add: direct deposit by the customer | 1,000 | |
| Less: dishonored cheque | (2,000) | |
| Less: note payable | (3,000) | |
| Add: bank charges twice recorded | 10 | |
| Add: bank mistake | 100 | |
| Adjusted balance | 10,110 | 10,110 |
Fadi Chemical
Bank Reconciliation Statement
As on 30th June, 2013
| Adjusted Balance as per cash book | 10,110 |
| Add: un-presented cheques | 2,000 |
| Add: unpresented cheques | 2,000 |
| Less: un-cleared cheques | (500) |
| Less: un-cleared cheques | (3,200) |
| Less: bank error | (100) |
| Balance as per pass book | 10,310 |