Firebird Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for February 2019 indicated the following: The correct amount of check #7853 is $797. It was recorded as a cash disbursement of $779 bymistake. The check was issued to pay for merchandise purchases. The check appeared on thebank statement correctly.Required:1. Prepare a bank reconciliation schedule at February 28, 2019, in proper form.2. What is the amount of cash that should be reported on the February 28, 2019 balance sheet? Balance, February 28, 2019Service charge for FebruaryInterest earned during FebruaryNSF check from Valerie Corp. (deposited by Firebird)Note ($12,000) and interest ($350) collected froma customer of Firebird's$87,39210087563012,350An analysis of canceled checks and deposits and the records of Firebird Corp. revealed thefollowing items:Checking account balance per Firebird's booksOutstanding checks as of February 28Deposit in transit at February 28Error in recording check 7853 issued by Firebird$73,2606,4404,78518

Bank reconciliation statement is prepared with a view to reconcile the balance as per entity's…

Answered: Balance, February 28, 2019 Service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Firebird Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for February 2019 indicated the following: 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.
Required:
1. Prepare a bank reconciliation schedule at February 28, 2019, in proper form.
2. What is the amount of cash that should be reported on the February 28, 2019 balance sheet?

Balance, February 28, 2019
Service charge for February
Interest earned during February
NSF check from Valerie Corp. (deposited by Firebird)
Note ($12,000) and interest ($350) collected from
a customer of Firebird's
$87,392
100
875
630
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
Outstanding checks as of February 28
Deposit in transit at February 28
Error in recording check 7853 issued by Firebird
$73,260
6,440
4,785
18

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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