Question

Firebird Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for May 2011 indicated the following:
Balance, May 31, 2011 ................ $42,600
Service charge for May ................ 50
Interest earned during May ............... 650
NSF check from Valerie Corp. (deposited by Firebird).... 870
Note ($7,000) and interest ($250) collected for
Firebird from a customer of Firebird’s ........... 7,250
An analysis of canceled checks and deposits and the records of Firebird Corp. revealed the following items:
Checking account balance per Firebird’s books ........ $37,205
Outstanding checks as of May 31 .............. 4,100
Deposit in transit at May 31 ................. 5,640
Error in recording check #4456 issued by Firebird ........ 45
The correct amount of check #4456 is $550. It was recorded as a cash disbursement of $505 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 May 31, 2011, in proper form.
2. What is the amount of cash that should be reported on the May 31, 2011 balance sheet?


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  • CreatedSeptember 22, 2015
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