Using the following information, prepare a bank reconciliation for Miller Co. for August 31:

1. The bank statement balance is $4,690
2. The cash account balance is $5,080.
3. Outstanding checks amounted to $715.
4. Deposits in transit are $1,020.
5. The bank service charge is $40.
6. A check for $72 for supplies was recorded as $27 in the ledger.

Mr Azizi is unable to reconcile the bank balance of Pearl Trading Sdn Bhd as at 31 October 2018. Mr Azizis reconciliation is as follows:

RM RM

Cash balance per bank 5,340

Add: Non-sufficient fund check from UXY Trading 1,040

Bank dividend 120 1,160

6,500

Less: Bank service charge 35

Adjusted balance per bank 6,465

Cash balance per books 2,695

Less: Deposits in transit 850

1,845

Add: Outstanding checks: No. 167652 1,450

Add: Outstanding checks: No. 167659 3,000 4,450

Adjusted balance per books 6,295

REQUIRED:

1. Prepare a correct bank reconciliation of Pearl Trading Sdn Bhd for October 2018 without adjusting the cash book.

2. Journalise the entries required by the reconciliation.

3. Discuss any THREE (3) principles of internal control activities that Pearl Trading Sdn Bhd should exercise.