(Learning Objective 3: Preparing a bank reconciliation and the related journal entries) The October 31 bank statement of Dunlap Engineering Associates has just arrived from Carolina First Bank. To prepare the Dunlap bank reconciliation, you gather the following data:

a. Dunlap’s Cash account shows a balance of €7,605.86 on October 31.

b. The October 31 bank balance is €8,343.87.

c. The bank statement shows that Dunlap earned €15.45 of interest on its bank balance during October. This amount was added to Dunlap’s bank balance.

d. Dunlap pays utilities (€770) and insurance (€250) by EFT.

e. The following Dunlap cheques did not clear the bank by October 31:

■ spreadsheet

f. The bank statement includes a deposit of €915.20, collected on account by the bank on behalf of Dunlap.

g. The bank statement lists a €6.25 bank service charge.

h. On October 31, the Dunlap treasurer deposited €380.50, which will appear on the November bank statement.

i. The bank statement includes a €405.00 deposit that Dunlap did not make. The bank added €405.00 to Dunlap’s account for another company’s deposit.

j. The bank statement includes two charges for returned cheques from customers.

One is a €185.50 cheque received from a customer with the imprint “Unauthorized Signature.” The other is a nonsuffi cient funds cheque in the amount of €67.65 received from another customer.

❙ Requirements 1. Prepare the bank reconciliation for Dunlap Engineering Associates.

2. Journalize the October 31 transactions needed to update Dunlap’s Cash account. Include an explanation for each entry.