Question 4

The October 31 bank statement of Spooky Halloween Costumes Ltd. (SHC) has just arrived from TD Bank. To prepare the SHC bank reconciliation, you gather the following data:

• SHCs Cash account shows a balance of $2,256.14 on October 31.
• The October 31 bank balance is $4,023.05.
• The bank statement shows that SHC earned $38.19 of interest on its bank balance during

October. This amount was added to SHCs bank balance.

• SHC pays utilities of $250 and insurance of $100 by EFT.
• The following SHC cheques did not clear the bank by October 31:

Cheque #	Amount
237	$46.10
288	141.00
291	578.05
293	11.87
294	609.51
295	8.88
296	101.63

• The bank statement includes a donation of $850, electronically deposited to the bank for SHC.
• The bank statement lists a $10.50 bank service charge.
• On October 31, the SHC treasurer deposited $16.15, which will appear on the November bank

statement.

• The bank statement includes a $300 deposit that SHC did not make. The bank added $300 to

SHCs account for another companys deposit.

• The bank statement includes two charges for returned cheques from donors. One is a $395

cheque received from a donor with the imprint Unauthorized Signature. The other is a nonsufficient funds cheque in the amount of $146.67 received from a client.

1. Prepare the bank reconciliation for SHC.
2. Journalize the October 31 transactions needed to update SHCs Cash account. You do not need to

include an explanation for each entry.