Question

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.

Answer 1

Bank Reconciliation Statement as on March 31, 2018
S. No	Particulars	Plus Items (Rs)	Minus Items (Rs)
	Overdraft as per the Cash Book		1,72,985
(i)	Cheques issued but not presented for payment	60,000
(ii)	Cheques deposited but not collected		75,000
(iii)	Cheque deposited but dishonoured		15,000
(iv)	Bill sent for collection honoured but not entered in the Cash Book	1,50,000
(v)a	Bank Charges		1,500
(v)b	Bank Interest on overdraft		8,500
(vi)	Overdraft balance wrongly taken as debit balance (Note)		1,000
	Overdraft as per the Pass Book	63,985
		2,73,985	2,73,985

Note: Overdraft balance has credit balance but taken as debit balance, so to correct the error credit cash book by double amount.
Therefore, 1,000 should be shown in the minus side.