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Computation of Income Tax

Cash Book of ...

Question

Cash Book of a merchant showed bank balance of ₹ 23,000 on 31st March, 2018. On going through the Cash Book, it was found that two cheques for ₹ 5,000 and ₹ 7,000 deposited in the month of March were not credited in the Pass Book till 2nd April, 2018 and three cheques for ₹ 6,000, ₹ 8,000 and ₹ 12,000 issued on 28th March, were not presented for payment till 3rd April, 2018. In addition to this, bank had credited merchant for ₹ 125 as interest and had debited him for ₹ 100 as bank charges for which entries in Cash Book were not recorded. Bank charges of ₹ 500 were reversed by the Bank.
Prepare Bank Reconciliation Statement as on 31st March, 2018.

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Solution

Bank Reconciliation Statement

as on March 31, 2018

S. No.

Particulars

Plus Items

(Rs)

Minus Items

(Rs)

Balance as per the Cash Book

23,000

(i)

Cheques deposited but not cleared

12,000

(ii)

Three cheques Rs 6,000 , Rs 8,000 and Rs 12,000 were issued but were not presented for payment

26,000

(iii)

Bank allowed Interest

125

(iv)

Bank Charges

100

(v) Bank Charges reversed 500

Balance as per the Pass Book

37,525

49,625

49,625

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Q. On 31st March 2018, Cash Book of B. Babu showed an overdraft of ₹ 18,000 with the Bank of India. This balance did not agree with the balance as shown by the Bank Pass Book. You find that Babu had paid into the bank on 26th March four cheques for ₹ 10,000, ₹ 12,000, ₹ 6,000 and ₹ 8,000. Out of these the cheque for ₹ 6,000 was credited by the bank in April, 2018. Babu had issued on 24th March three cheques for ₹ 15,000, ₹ 12,000 and ₹ 7,000. The first two cheques were prsented to the bank for payment in March, 2018 and the third cheque in April, 2018.
You also find that on 31st March, 2018 the bank had debited Babu's Account with ₹ 500 for interest and ₹ 20 as charges, but Babu had not recorded these amounts in his books.
Prepare Bank Reconcliation Statement as on 31st March, 2018 and ascertain the balance as per Bank Pass Book.

Q. On 31st March, 2018, Cash Book of Mahesh showed debit bank balance of ₹ 75,000. When compared with the Bank Statement, following facts were discovered. On 30th March, two cheques of ₹ 5,000 and ₹ 7,000 were deposited in the bank but were not realised till date. On 28th March, three cheques of ₹ 6,000, ₹ 8,000 and ₹ 12,000 were issued but none of these were presented to the bank for payment. On 31st March, bank credited ₹ 1,250 as interest but this was not recorded in the Cash Book. Similarly, the bank had charged ₹ 150 as bank charges but this was not recorded in the Cash Book.
Bank paid insurance premium of ₹ 5,000 but it was recorded as ₹ 500 in Cash Book. Prepare Bank Reconcilation Statement on 31st March, 2018.

Q. Bank Statement of a customer shows bank balance of ₹ 62,000 on 31st March, 2018. On Comparing it with the Cash Book the following discrepancies were noted:
(i) Cheques were paid into the bank in March but were credited in April:
P–₹ 3,500; Q–₹ 2,500; R–₹ 2,000.
(ii) Cheques issued in March were presented in April:
X–₹ 4.000; Q–₹ 4,500.
(iii) Cheque for ₹ 1,000 received from a customer entered in the Cash Book but was not banked.
(iv) Pass Book shows a debit of ₹ 1,000 for bank charges and credit of ₹ 2,000 as interest.
(v) Interest on investment ₹ 2,500 collected by the bank appeared in the Pass Book.
Prepare Bank Reconciliation Statement showing the balance as per Cash Book on 31st March, 2018.

Q. On 31st March, 2018, Cash Book of a merchant showed bank overdraft of ₹ 1,72,985. On comparing the Cash Book with Bank Statement, following discrepancies were noted:
(i) Cheques issued for ₹ 60.000 were not presented in the bank till 7th April, 2018.
(ii) Cheques amounting to ₹ 75.000 were deposited in the bank but were not collected
(iii) A Cheque of ₹ 15,000 received from Mahesh Chand and deposited in the bank was dishonoured but the non-payment advice was not received from the bank till 1st April, 2018.
(iv) ₹ 1,50,000 being the proceeds of a bill receivable collected appeared in the Pass Book but not in the Cash Book.
(v) Bank charges ₹ 1,500 and interest on overdraft 8,500 appeared in the Pass Book but not in the Cash Book.
(vi) Overdraft balance as per Cash Book of ₹ 500 on 28th February, 2018 was wrongly carried forward as debit balance. The error was noted at the time of preparing the Bank Reconciliation Statement as on 31st March, 2018.
Prepare Bank Reconciliation Statement and show what balance the Bank Pass Book would indicate on 31st March, 2018.

Q. Prepare Bank Reconciliation Statement from the following particulars as on 31st March, 2018 when Pass Book shows a debit balance of ₹ 2,500:
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(ii) Cheques deposited for ₹ 5,500 but cheques of ₹ 500 were collected on 10th April, 2018.
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(iv) A cheque of ₹ 300 debited in Cash Book but omitted to be banked.
(v) Interest allowed by bank ₹ 400 but no entry was passed in the Cash Book.

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