Bank Reconciliation Statement Solved Example 2

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Solved Example [2] – Bank reconciliation statement

Rocky’s Cash Book (Bank Column only) for the month of June 2008 was as follows:

Dr. ($) Cr. ($)


June 1 Balance b/f 600 June 3 Tim 90
June 14 Cash 225 June 19 Sam 270
June 26 Roby 60 June 23 Rakesh 1050
June 30 Balance 450
1410 1410

The following Bank Statement was received in early July 2008:

2008 Details Payments Receipts Balance


June 1 Balance brought forward 520

1 Error corrected-contra 31 80 600


May
14 Cash 225 825
15 Tim 90 735
20 Banker’s Order-fire 85 650
insurance
21 Sam 270 380
26 Roby 60 440
29 Unpaid cheque –Roby 60 380
30 Dividend 90 470

You may assume that the bank balance was successfully reconciled at the end of March.

a) Bring the Cash Book up to date, starting with the balance at 30 June 2008.
b) Prepare a Statement, under its correct title, to reconcile the difference between your
amended Cash Book balance and the balance in the Bank Statement on 30 June 2008.
c) State the amount of the up-dated bank balance.

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Solution
(a)Cash Book
2008 ($) ($)
June Dividend 90 June Balance b/f 450
30 30
Balance c/f (adjusted) 505 Bankers’ Order 85
Dishonoured Cheque 60
595 595

(b)Bank Reconciliation Statement


($)
Balance as per Bank Statement (Credit) 470
Add Uncredited Deposits 75
545
Less Unpresented Cheques 1050
Balance as per Cash Book (Credit) 505

(c) The amount of the up-dated balance is $505 (credit balance as per Cash Book)

Hint 1
This is a credit balance i.e. an overdraft
Hint 2
This entry has already appeared in Cash Book in May. Note the date 31 May. Note also the difference
between opening balance in Cash Book ($600) and opening balance in Bank Statement ($520) is $80.
So no adjustments in June.
Hint 3
This is a credit balance. A credit balance in Bank Statement is equivalent to a debit balance in Cash
Book.
Hint 4
Updated means, after all necessary adjustments have been made.

©dineshbakshi.com
This worksheet has been downloaded from www.dineshbakshi.com. Home to IGCSE Business Studies, Economics ,Accounting & ICT revision.
Loaded with interactive quizzes, business news, study notes, case studies and lot of goodies for teachers and students.

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