Question

Firebird Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for February 2019 indicated the following:

Balance, February 28, 2019	$87,392
Service charge for February	100
Interest earned during February	875
NSF check from Valerie Corp. (deposited by Firebird)	630
Note ($12,000) and interest ($350) collected from a customer of Firebird’s	12,350

An analysis of canceled checks and deposits and the records of Firebird Corp. revealed the following items:

Checking account balance per Firebird’s books	$73,260
Outstanding checks as of February 28	6,440
Deposit in transit at February 28	4,785
Error in recording check 7853 issued by Firebird	18

The correct amount of check #7853 is $797. It was recorded as a cash disbursement of $779 by mistake. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.

Prepare a bank reconciliation for Firebird Corp. in proper form.

What is the amount of cash that should be reported on the February 28, 2019 balance sheet of Firebird Corp. (circle and/or bold/underline the $ amount)?

Answer 1