Exercises: Problem 1: (IAA) Sensible Company provided the following ledger account of the cash in bank maintained with the Second Bank: Cash in Bank - SECOND BANK 100,000 Dec. 1 Balance 6 Deposit 30,000 12 Deposit 40,000 24 Deposit 50,000 31 Deposit 60,000 Dec. 1 Check No. 771 20,000 4 772 5,000 6 773 35,000 10 774 15,000 14 775 30,000 18 776 25,000 24 777 40,000 The following bank statement was received from the Second Bank by Sensible Company. Date Withdrawal Deposits Dec. 1 Balance Check No. 768 10,000 771 20,000 4 6 772 5,000 773 35,000 30,000 12 774 15,000 40,000 12 776 52,000 24 1042 8,000 50,000 28 NSF Check 10,000 45,000CM 28 Service Charge 5,000 Balance 130,000 Other Information: 1. Sensible Company reconciled its bank balance on November 30 with two checks, No. 768 for P10,000 and No. 770 for P20,000 outstanding. 2. Check No. 1042 was drawn by Sensitive Company. The bank charged it in error to the account of Sensible Company. 3. Check No. 776 was correctly drawn for P52,000 in payment of account. The amount P25,000 was entered in the books of original entry. 4. The bank credit on Dec. 28 represents the proceeds of a P50,000 note, less a collection fee of P5,000 collected by the bank and credited to the account. 5. The NSF check was received from a customer in payment of account. Required: a. Prepare a bank reconciliation statement on December 31. b. Prepare adjusting entries on December 31.