Exercises OBJ.2 8-1 p. 403 PE 8-1A Internal control elements Identify each of the following as relating to (a) the control environment, (b) control pro cedures, or (c) monitoring: 1. Hiring of external auditors to review the adequacy of controls 2. Personnel policies 3. Safeguarding inventory in a locked warehouse 1) Bank Reconciliation The cash account for Murphy Co. on May 31, 2014 indicated a balance of $25,915. The May bank statement indicated an ending balance of $30,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a. Checks outstanding totaled $8,985 A deposit of $3,796 had been made too late to appear on the bank statement. A check for $1,482 returned with the statement had been incorrectly recorded as $482. The check was originally issued to pay on account. The bank collected $2,505 on a note left for collection. The face value of the note was $2,500. c. Bank service charges for May amounted to $70. A check for $1,894 was returned by the bank because of insufficient funds. Prepare a bank reconciliation as of May 31, 2014. Journalize the necessary entries