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. Varians 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 Varians bank balance.

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

e. Varian checks totaling $1,497.04 did not clear the bank by May 31.

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 deposit that Varian did not make. The bank added $300 to Varians account for another companys deposit.

j. The bank statement includes 2 charges for returned checks from customers. One is a $395 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 Varians Cash account. Include an explanation for each entry.