Learn Italian: Hai i soldi nel portafoglio? - Do you have the money in the wallet?

Because Italian combines prepositions like in with the word for 'the' when they are next to each other. Portafoglio (wallet) is a masculine word starting with a consonant, so it uses the article il. When you combine in + il, it becomes nel.

Why is it i soldi (plural) when the English translation says 'the money' (singular)?

In Italian, the common word for money, soldi, is plural (it literally translates to 'monies'). Because it is a masculine plural noun, it takes the plural article i.

There is no 'do' in the Italian sentence. How does it form a question?

Italian doesn't use helper words like 'do' or 'does' to make questions. You simply use the normal statement structure (Hai = you have) and raise your tone of voice at the end. In writing, the question mark does all the work!

Is portafoglio made up of two different words?

Yes! It is a compound word made from porta (carries) and foglio (sheet of paper or bill). So a wallet is literally a 'sheet-carrier'!