25 Bank Reconciliation Statement (Account No. A) as on 31.12.2016 Bank balance as per Ledger 5,000 Add: 0 A deposit made into Account 'A' wrongly entered in Account B in the Ledger 1,500 (iv) Cheque issued but not presented 10,000 (vi) Interest credited by bank not entered in the ledger 50 11,550 16,550 Less: A withdrawal from Account 'A' has been entered in the ledger in Account 'B' 500 Incidental charges not entered in the ledger 10 (vii ) Cheque deposited but not credited by the Bank 5,000 5,510 Bank balance as per the Pass Book (Cr.) 11,040 Bank Reconciliation Statement (Account No. B) as on 31.12.2016 Bank Overdraft as per Ledger 2.250 Add: A deposit made into Account A has been wrongly entered in the ledger in Account 'B' 1,500 W Incidental charges not entered in the ledger b) Interest charged by bank has not been recorded in the ledger (vii) Cheque deposited but not credited by the Bank 3,500 5,300 7,550 Less: A withdrawal from Account 'A' has been entered in the ledger in Account 'B' 500 (iv) Cheque issued but not presented 1,000 1,500 Bank Overdraft as per the Pass Book (Dr.) 6,050 Illustration 7 The Balance Sheet and Profit and Loss Account of a trader show the following two items: Bank balance -Overdrawn 36,200 Profit and Loss Account - Trading profit for the year 32,31.750 However, the balance as shown on the bank statement does not agree with balance as shown in the cash book. Your investigation of this matter reveals the following differences, and additional information: 1. Cheque payments entered in the cash book but not presented to the bank until after the year end +31,380. 275 915 2. Bankings entered in the cash book but not credited by the bank until after the year end 34,250. 3. Items shown on bank statements but not entered in the cash book- Bank charges - 32,450 Standing order - Loan repayments 12 instalments @360 each Standing order - Being quarterly rent of godown 1,250, due on each quarter day. Dividend received on investment 900. 4. Cheques for 350 and 1.400 received from customers were returned by the bank as dishonoured, but no entries concerning these events have been made in the cash book. 5. The cheques were returned by the bank for the following reasons (i) the 350 cheque requires an additional signature and should be honoured in due course; (ii) the 1,400 cheque was unpaid due to the bankruptcy of the drawer and should be treated as a bad debt. 6. The loan repayments of 360 represent 300 capital and 60 interest. 7. A cheque for 450 received from a customer in settlement of his account had been entered in the cash book as 34,500 on the payments side, analysed to the purchases ledger column and later posted. You are required to prepare : (a) a Statement reconciling the cash book balance with the bank statement; and (b) a Statement showing the effect of the alterations on the trading profit