Bank Reconciliation Statement | Solved example 2

 

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 hint1

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 May

hint 2

80

600

14

Cash

 

225

825

15

Tim

90

 

735

20

Banker’s Order-fire insurance

85

 

650

21

Sam

270

 

380

26

Roby

 

60

440

29

Unpaid cheque –Roby

60

 

380

30

Dividend

 

90

hint 3
470

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

  1. Bring the Cash Book up to date, starting with the balance at 30 June 2008.
  2. 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.
  3. State the amount of the up-dated bank balance.hint 4

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.


Solution

1. Cash Book