The May 31 bank statement of Varian Engineering Associates has just arrived from Carolina First Bank. To prepare the Varian bank reconciliation, you gather the following data:

a. Varian's Cash account shows a balance of $2,256.14 on May 31.

b. The May 31 bank balance is $3,374.22.

c. The bank statement shows that Varian earned $38.19 of interest on its bank balance during May. This amount was added to Varian's bank balance.

d. Varian pays utilities ($750) and insurance ($290) by EFT.

e. The following Varian checks did not clear the bank by May 31:

Check No. Amount

237............................ $ 46.10

288............................ 141.00

291............................ 578.05

293............................ 11.87

294............................ 609.51

295............................ 8.88

296............................ 101.63

f. The bank statement includes a deposit of $891.17, collected on account by the bank on behalf of Varian.

g. The bank statement lists a $10.50 bank service charge.

h. On May 31, the Varian treasurer deposited $16.15, which will appear on the June bank statement.

i. The bank statement includes a $300.00 deposit that Varian did not make. The bank added $300 to Varian's account for another company's deposit.

j. The bank statement includes 2 charges for returned checks from customers. One is a $395.00 check received from a customer with the imprint "Unauthorized Signature." The other is a nonsufficient funds check in the amount of $146.67 received from another customer.

Required

1. Prepare the bank reconciliation for Varian Engineering Associates.

2. Journalize the May 31 transactions needed to update Varian's Cash account. Include an explanation for each entry