Preparation of bank reconciliation

a. Prepare a bank reconciliation at October 31, 2016.

b. Prepare the journal entries necessary as a result of the bank reconciliation

Catalina Holdings Ltd. (CHL), a Calgary-based property management company, is owned by Leslie Smeal. Leslie is trying to prepare a bank reconciliation for CHL's bank account for October 31, 2016. A review of CHL's bank statement and accounting records showed the following:

1.The cash balance per the bank statement was $26,936.89.

2.The accounting records showed a balance in the cash account of $21,260.16.

3.Two cheques that had been written and mailed by CHL had not been cashed. These were cheques #5109 for $10,505.10 and #5112 for $5,303.07.

4.CHL was paid $19.99 in interest by the bank during October.

5.A cheque for $1,125.58 that had been part of CHL's deposit on October 23 was not honoured by the bank because the client had insufficient funds.

6.Bank service charges for the month were $92.

7.Cheque #5101, which was for a utility payment, was incorrectly recorded by CHL's bookkeeper as $960 when the actual cheque was for $690 (which was the correct amount owing by CHL).

8.The bank had collected $3,110.25 on behalf of CHL related to a note receivable from one of CHL's clients. This included $110.25 in interest.

9.A deposit for $12,314.10 was made through the night deposit slot late on the evening of October 31.