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Financial accounting I – Reconciliation statement
BBA | BBA-BI | BBA-TT | BCIS 1st
PU 2013 Spring Q. No. 2a
On December 31st bank statement for ABC company showed a balance of Rs. 6873.40. On this date, the cash account in the company’s ledger was Rs. 2994.70. And a comparison of the bank statement with the cash account revealed the following facts:
i. Cheques under collection on December 31st, Rs. 298.70.
ii. Outstanding cheques for Rs. 1718.00.
iii. A cheque for Rs. 2194.90 issued to a supplier was recorded by the bank as Rs. 2914.90.
iv. A bill receivable of Rs. 5000 and interest of Rs. 300 collected by the bank have not been recorded in company’s account.
v. A cheque for Rs. 730.60 received from customer was returned by the bank as NSF.
vi. Bank service charge Rs. 90.
vii. In accordance with the company’s standing instruction on December 31, the bank paid insurance premium of Rs. 1,300 for the company’s car. The Accountant did not record the transaction.
Required:
i. Bank reconciliation statement for ABC Company for the month of December. [8]
ii. How much balance should be reported on the balance sheet? [2]
Solution:
i.
ABC Company
Bank Reconciliation Statement
As on 31st December
| Particulars | Amount Rs. |
| Balance as per bank statement Add: Deposit in transit Less: Errors in recording Less: Outstanding checks | 6,873.40 298.70 720 1,718 |
| Adjusted balance as per bank statement | Rs. 6,174.1 |
| Balance as per company’s book Add: Bill receivable Add: Interest on bill receivable Less: NSF check Less: Bank service charge Less: Insurance premium paid by bank | 2,994.70 5,000 300 730.60 90 1,300 |
| Adjusted balance as per company’s book | Rs. 6,174.1 |
ii. The adjusted cash balance provided by the bank reconciliation statement is Rs. 6,174.1. Therefore, the adjusted balance Rs. 6,174.1 should be reported on the balance sheet.