Question

Jagdeep Singh's Cash book on 31st March, 2012 showed an over draft balance of Rs 12,100 on his No. 1 Account at the bank. On investigation it is found that:

(a) Cheque drawn amounting to Rs 4,200 had not been presented to the bank for payment.

(b) Cheque Rs 3,600 entered in the Cash Book and paid into the bank had not been credited by the bank.

(c) The receipts side of the Cash Book had been under cast by Rs 1,000.

(d) Bank charges on' 50 entered on the bank statement had not been entered in the Cash Book.

(e) A cheque for Rs 5,200 drawn on the Account No.1 had been charged by the bank in error to the Account No.2.

(f) A dividend of Rs 300 paid direct to the bank had not been entered in the Cash Book.

(g) A cheque for Rs 700 received from a debtor paid into the bank dishonoured and shown as such by the Bank but no entry of dis honour had been made in the Cash Book.

(h) A cheque of Rs 420, drawn by Bank’s another customer of the same name, had been charged to Jagdeep bank account by error.

You are required:

(i) To show the necessary adjustments to be made in the Cash Book; and

(ii) To prepare a Bank Reconciliation Statement for No.1 Account as at 31st March, 2012.

$\begin{array}{ccc}& & \\ \text{Jan.}1& \text{Cash in Hand}& 4,000\\ & \text{Cash at Bank}& 12,000\\ \text{Jan.}4& \text{Sold goods for cash}& 13,200\\ \text{Jan.}5& \text{Received from Suresh}& 2,500\\ \text{Jan.}6& \text{Received a Cheque from Ravi and deposited it into Bank.}& 6,400\\ \text{Jan.}7& \text{Salary paid to office staff by Cheque}& 7,600\\ \text{Jan.}10& \text{Paid Sudhir by Cheque}& 5,000\\ \text{Jan.}12& \text{Cash Purchases}& 8,000\\ \text{Jan.}16& \text{Cash deposited into Bank}& 10,000\\ \text{Jan.}20& \text{Cash Sales}& 15,100\\ & \text{Purchased Machinery and payment made by Cash}& 6,800\\ \text{Jan.}21& \text{Paid wages for erection of above Machinery}& 400\\ \text{Jan.}22& \text{Withdrew from Bank for office use}& 7,500\\ \text{Jan.}23& \text{Received a Cheque from Anil and deposited it into Bank}& 4,600\\ \text{Jan.}27& \text{Anil's Cheque returned by bank dishonoured}& 4,600\\ \text{Jan.}31& \text{Paid into Bank}& 12,000\end{array}$

Answer 1

(i) Cash Book (Amended) (Bank Column Only)

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Amount}& \text{Date}& \text{Particulars}& \text{Amount}\\ & & \text{(Rs)}& & & \text{(Rs)}\\ 2012& & & 2012& & \\ 31\text{Mar.}& \text{To undercasting or receipt}& & 31\text{Mar.}& \text{By Balance b/d}& 12,100\\ & \text{side}& 1,000& & \text{By Bank Charges}& 50\\ & \text{To Dividend}& 300& & \text{By Cust. (dishonoured}& \\ & \text{To Bal. c/d}& 11,550& & \text{change)}& \\ & & \overline{\underset{–}{12,850}}& & & \overline{\underset{–}{12,850}}\end{array}$

(ii) Bank Reconciliation Statement

$\begin{array}{ccc}\text{Particulars}& \text{+Items}& \text{- Items}\\ \text{Bank overdraft as per cash book}& -& 11,550\\ \text{(i) Cheques drawn but not presented}& 4,200& -\\ \text{(ii) Cheques deposited but not collected}& -& 3,600\\ \text{(iii) Cheque drawn shown by bank in Account II}& 5,200& -\\ \text{(iv) Cheques of another person deducted by bank}& -& 420\\ \text{Bank overdraft as per pass book}& 6,170& \\ & \overline{\underset{–}{15,570}}& \overline{\underset{–}{15,570}}\end{array}$

Or

Cash Book

$\begin{array}{cccccccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Cash}& \text{Bank}& \text{Date}& \text{Particulars}& \text{L.F.}& \text{Cash}& \text{Bank}\\ & & & \text{(Rs)}& \text{(Rs)}& & & & \text{(Rs)}& \text{(Rs)}\\ 2011& & & & & 2011& & & & \\ \text{Jan.}1& \text{To Bank b/d}& & 4,000& 12,000& \text{Jan.}7& \text{By Salaries}& & -& 7,600\\ \text{Jan.}4& \text{To Sales A/c}& & 13,200& -& \text{Jan.}10& \text{By Sudhir}& & -& 5,000\\ \text{Jan.}5& \text{To Suresh}& & 2,500& -& \text{Jan.}12& \text{By Purchases}& & 8,000& -\\ \text{Jan.}6& \text{To Ravi}& & -& 6,400& \text{Jan.}16& \text{By Bank A/c}& \text{C}& 10,000& -\\ \text{Jan.}16& \text{To Cash A/c}& \text{C}& -& 10,000& \text{Jan.}20& \text{By Machinery}& & 6,800& -\\ \text{Jan.}20& \text{To Sales A/c}& & 15,100& -& \text{Jan.}21& \text{By Machinery}& & 400& -\\ \text{Jan.}22& \text{To Bank A/c}& \text{C}& 7,500& -& \text{Jan.}22& \text{By Cash A/c}& \text{C}& -& 7,500\\ \text{Jan.}23& \text{To Anil}& & -& 4,600& \text{Jan.}27& \text{By Anil}& & -& 4,600\\ \text{Jan.}31& \text{To Cash A/c}& \text{C}& -& -& \text{Jan.}31& \text{By Bank A/c}& \text{C}& 12,000& -\\ & & & & & \text{Jan.}31& \text{By Balance c/d}& & 5,100& 20,300\\ & & & \overline{\underset{–}{42,300}}& \overline{\underset{–}{45,000}}& & & & \overline{\underset{–}{42,300}}& \overline{\underset{–}{45,000}}\\ \text{Feb}.1& \text{To Balance b/d}& & 5,100& 20,300& & & & 42,300& 45,000\end{array}$