Question

Valentine Investigations has the following information for its cash account:

Balance, 1/31	$ 7,379
Deposits during February	106,890
Checks written during February	102,470

Valentine’s bank statement for February contained the following information:

Valentine Investigations

Bank Reconciliation Schedule

February 28, 20XX

1	Balance per bank, 1/31		$8,898.00
2	Add:
3	February deposits		105,400.00
4			$114,298.00
5	Less:
6	Checks paid in February	$(100,100.00)
7	Bank service charge	(50.00)
8	Debit memo (electric bill)	(700.00)	(100,850.00)
9	Balance per bank, 2/28		$13,448.00

A comparison of company records with the bank statement provided the following data:

	At 1/31	At 2/28
Deposits in transit	$2,700	$4,190
Outstanding checks	4,219	6,589

	Required:
1.	Prepare a bank reconciliation as of February 28.
2.	Prepare adjusting entries for Valentine based on the information developed in the bank reconciliation.
3.	What is the amount of cash that should be reported on the February 28 balance sheet?

Answer 1