Reference no: EM13613999

 

The bookkeeper at Tony Company has asked you to prepare a bankreconciliation as of February 28, 2006. The February 28, 2006, bankstatement and the February T-account for cash showed the following(summarized):

Bank Statement

      Checks                             Deposits         Other                Balance

Balance, February 1, 2006                                                   $52,600

Deposits during February                                $30,65            83,250

Interestearned                                                $150              83,400

Checks cleared during February   $49,200                             34,200

NSF checks-S. H. Schaffer                                320                33,880

Bank service charges                                        40                  33,840

Balance, February 28, 2006                                                    33,840

+ Cash (A) -

Feb. 1            Balance               49,400       

Feb.              Checks written     50,400

Feb.               Deposits              38,450

Tony Company's bank reconciliation at the end of January2006 showed outstanding checks of $3,200. No deposits were intransit at the end of January, but a deposit was in transit at theend of February.

Required:

1. Prepare a bank reconciliation forFebruary.

2. Prepare any journal entries required as aresult of the bank reconciliation. Why are they necessary?

3. After the reconciliation journal entries areposted, what balance will be reflected in the Cash accountin the ledger?

4. If the company also has $50 on hand, whichis recorded in a different account called Cash on Hand,what total amount of cash should be reported on the balance sheetat the end of February?