The accountant at Watsonia Stores prepares a monthly bank reconciliation. On 31 August she received a bank statement from QBE Bank, which had a credit balance of $8 950. Watsonia Stores' cash at bank account per the general ledger showed a debit balance of $9 810. A comparison of the bank statement with the cash payments and cash receipts journals revealed the following information: (1) QBE bank mistakenly included a deposit to Watsonia Stores' bank statement that related to Tolga Ltd. The deposit amount was for $1 180. The mistake will be corrected in September. (2) Outstanding EFTs at 31 August totalled $3 550. Cash receipts recorded in the cash receipts journal on 31 August of $5 300 were not on the bank statement. (3) The bank statement included bank charges of $60. (4) In reviewing the cheque payments, a mistake was discovered on cheque no. 574 for the payment of rent expense. The amount of the cheque was for $3 150 but was recorded in the cash payments journal as $3 510. (5) The bank statement showed a reversal entry of $590 that was originally deposited by P. Macca, a customer, to Watsonia Stores. Required (a) Prepare a bank reconciliation for the Watsonia Stores at 31 August. (4 marks) (b) Prepare the adjusting entries as at 31 August (3 marks) (c) Identify the principle of internal control that is being followed in the case: Each month the stock on hand are compared with the accounting records by an internal auditor. (1 mark) *Narrations in the general journals are not required.