SASKATOON COUNTRY SUPPLIES

TUTORIAL OBJECTIVES

The purpose of this case is to let you practice preparing a bank reconciliation statement and its associated adjusting entries. Your task in this case, as Jim Tykoliz, is to prepare the bank reconciliation at the end of August, 2004.
TUTORIAL INSTRUCTIONS

This case will take you through the process of preparing the bank reconciliation statement for Saskatoon Country Supplies. If you have any questions, email your questions to your instructor. You can also check the Tutorial 2 FAQ page at the end of this document.
One more tip!

Make sure you have familiarized yourself with the readings on bank reconciliations in your textbook.
GETTING STARTED

To begin preparing the bank reconciliation, youll need the following items: A list of cash receipts (part of your records) A list of cash disbursements (part of your records) A copy of the last bank reconciliation statement (part of your records) A copy of your bank statements since the last bank reconciliation (part of the banks records)

The purpose of the bank reconciliation statement is to understand why the cash balance in our account with the bank does not match the cash balance in our books. Once we find out what the discrepancies are, we can determine an adjusted cash balance. To find out what the discrepancies are, we need to do two things: Find out what the bank knows that we do not Find out what we know that the bank does not

BALANCE PER RECORDS

In this section of the bank reconciliation, we are trying to take our records and adjust them based on the banks records. We must look for items that the bank would know about that we would not. These items could include the following: Automatic deductions from your account Bank charges Interest on your bank account Other debit/credit memoranda

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The statements title should include the company name, the name of the statement and the date of reconciliation. Then title the current section of the bank reconciliation with the title Balance per records. Now, start with either the previous cash balance from your most recent balance sheet or bank reconciliation. SCSs records show an opening cash balance of $14,354, which can be found on the balance sheet (Exhibit 3) or the most recent bank reconciliation (Exhibit 5). The start of your bank reconciliation should look like this:
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004

Cash Receipts

$ 14,354.00

We started with our opening balance in our cash account from the previous set of statements. A month has gone by so now we have to make adjustments to the cash balance, related to the months activities. First we will do the adjustments that we know about. We definitely know the cash we collected during the period. SCS has a cash receipts/bank deposits list for us to use (Exhibit 1). We need to record the effect of these receipts on our opening cash balance in our records; therefore, we must add these receipts to our cash balance. SCS collected $72,776.55, and made the deposits to the bank. You would record this on the bank reconciliation statement as follows:
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts

$ 14,354.00 72,776.55 $ 87,130.55

Cash Disbursements

Just as we added our cash receipts to our opening balance in cash, we need to subtract the cash disbursements for the month that we have recorded. SCS had $60,062.47 in cash disbursements (Exhibit 2). To reflect this, subtract it from your opening balance on your bank reconciliation statement.

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Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004

$ 14,354.00 72,776.55 $ 87,130.55 60,062.47 $ 27,068.08

The $27,068.08 remaining is what you know your cash balance to be, according to your records, as of August 31, 2004.
Finding Other Adjustments

Your next concern is finding out what entries occurred during the month in your bank account that you do not know about. Start by verifying that each item on the bank statement (Exhibit 4) appears in your records (the cash disbursements list, the cash receipts list and the previous reconciliation). Highlight the items on the bank statement that are not listed in your cash receipts (Exhibit 1) or cash disbursements (Exhibit 2). Items that increase the banks balance should be added to your cash balance. Items that decrease the banks balance should be subtracted from your cash balance.
Additions to Our Records

A reminder ... We need to look at the previous bank reconciliation statement as part of our records, too, since we may have late deposits that will be added to the banks records early in the month. For example, on August 1, the bank statement shows a deposit of $9,981.31 that was not part of our cash receipts, and you may be inclined to add it to our bank balance (because it doesnt appear on our cash receipts list); however, if you look at the last reconciliation (Exhibit 4), weve adjusted the bank balance already for this amount. The fact that weve recorded this deposit on our bank reconciliation indicates that this is something we already know about, so we do not have to adjust our records. As you look through the bank statement, there is one item on the bank statement that we have not recorded in our cash receipts or on a previous reconciliation. This item increases the bank statement balance.
BANK STATEMENT For the month of August 2004 Date Description Debit Credit Balance

26 28 30

Deposit Deposit Credit memo, interest

10,010.86 7,224.45 49.32

10,150.27 17,374.72 17,424.04

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This is a credit memorandum for the interest weve earned on the cash in our bank account. We do not have this recorded as a cash receipt; therefore, we must record it as an addition to our records as follows:
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned

$ 14,354.00 72,776.55 $ 87,130.55 60,062.47 $ 27,068.08 49.32 $ 27,117.40

Subtractions from our Records

A reminder ... We need to use our previous bank reconciliation as a source of information. There are often outstanding cheques from the previous month that will be cashed early in the month. These outstanding cheques will not appear on our cash disbursements list for the current month; therefore, you may erroneously assume that there is a debit to your bank account that you have not recorded. If you dont look at the previous reconciliation, you cannot confirm whether the debit is an outstanding cheque (that you have already recorded) or a new item (that is unrecorded). There are four items on the bank statement that decrease the bank balance that would have not been recorded in our cash disbursements: 1. 2. 3. 4. A mortgage interest payment (August 15) A mortgage principal payment (August 15) An NSF Cheque (August 19) A charge for bank service fees (August 20).

Item #1 Mortgage Interest Payment BANK STATEMENT For the month of August 2004 Date Description Debit Credit Balance

12 14 15

Cheque #5216 Deposit Debit memo, mortgage interest payment

24,198.20 6,565.76 612.50

8,317.05 14,882.81 14,270.31

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Highlighted in yellow above is a debit memo informing us that our mortgage interest payment ($612.50) has been deducted from our bank balance. This is most likely an automatic deduction we arranged with the bank. On the 15th of every month, the bank deducts the interest charges on our mortgage for the month. Since this is not recorded in our cash disbursements list, we must subtract it from our records on the bank reconciliation statement. We will also have to record this interest expense as an adjusting entry after completing the bank reconciliation statement.
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest
Item #2 Mortgage Principal Payment

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50

BANK STATEMENT For the month of August 2004 Date Description Debit Credit Balance

15 15 19

Debit memo, mortgage interest payment Debit memo, mortgage principal payment Deposit

612.50 750.00 8,786.18

14,270.31 13,520.31 22,306.49

Highlighted in yellow above is a debit memo informing us that our mortgage principal payment ($750) has been deducted from our bank balance. This is most likely an automatic deduction arranged with the bank. On the 15th of every month, the bank deducts the principal payment on our mortgage for the month. Since this is not recorded in our cash disbursements list, we must subtract it from our records on the bank reconciliation statement. We will also have to record this reduction in our mortgage liability as an adjusting entry after completing the bank reconciliation statement.

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Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal
Item #3 NSF Cheque

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00

BANK STATEMENT For the month of August 2004 Date Description Debit Credit Balance

19 19 19

Cheque #5227 Debit memo, NSF cheque (Bill Jack) Cheque #5225

1,880.15 76.56 245.10

20,426.34 20,349.58 20,104.48

Highlighted in yellow above is a debit memo indicating that we deposited a cheque that the bank was unable to cash due to insufficient funds. This is more commonly known as a bounced cheque. Bill Jack wrote a cheque for $76.76, and he didnt have enough money in his account at the time the bank tried to cash it. When we accepted the cheque, we recorded it in our cash account. Now that we know we did not receive the cash, we need to subtract it from our cash account. We will need to make an adjusting entry for this when we have completed the bank reconciliation statement.

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Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal NSF cheque
Item #4 Service Charge

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00 76.76

BANK STATEMENT For the month of August 2004 Date Description Debit Credit Balance

19 20 21

Cheque #5225 Debit memo, service charge Cheque #5224

245.10 18.00 317.96

20,104.48 20,086.48 19,768.52

Highlighted in yellow above is a debit memo from the bank indicating the bank has deducted the service charges ($18) incurred for the month on our bank account. As you are aware, banks charge for the services they provide on our account. We will have to record this expense as an adjusting entry after completing the bank reconciliation statement.

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Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal NSF cheque Service charge
Adjusted Cash Balance (Our Records)

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00 76.76 18.00

1,457.26

We have now recorded all of the items the bank knows about that we did not know. Adding and subtracting all of the adjustments will give us an adjusted cash balance. This is the true amount of cash we have available to us as of August 31, 2004. When we finish the second half of the bank reconciliation statement (adjusting the banks records), the two adjusted cash balances should be equal. If you have done the adjustments correctly, the adjusted cash balance should be $25,660.14, and the top half of the bank reconciliation statement should look like the following:
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal NSF cheque Service charge Adjusted cash balance

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00 76.76 18.00

1,457.26 $ 25,660.14

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BALANCE PER BANK

In this section of the bank reconciliation statement, we are trying to take the banks records and adjust them against our records. We must look for items that we would know about that the bank would not. These items could include: Late deposits Outstanding cheques Other cash transactions that the company has completed that the bank would not have recorded

Title the current section of the bank reconciliation statement with the title Balance per bank. Then, start with the ending bank balance from the current bank statement. For SCS, this would be the bank balance at August 31, 2004, of $17,424.04 (see Exhibit 4). The start of this section of your bank reconciliation statement should look like this: Balance per bank: Bank statement balance, August 31, 2004
Finding Other Adjustments (Banks Records)

$ 17,424.04

Your next concern is finding out what you know that the bank does not. Start by verifying that each item that appears in your records (the cash disbursements list, the cash receipts list and the previous bank reconciliation) also appears on the bank statement. Highlight the items in your records that are not listed in the bank statement (Exhibit 4). Items that increase your cash balance should be added to the banks balance. Items that decrease your cash balance should be subtracted from the banks balance.
Additions to Banks Records

A reminder ... We also need to look at the previous bank reconciliation statement as part of our records, since we are likely to have late deposits that will be added to the banks records early in the month. For example, on August 1, we had a deposit of $9,981.31 that was not part of our cash receipts, and it was credited to our bank account on August 1, 2004. If the bank had not credited our account, you would need to do two things: Re-add the deposit again to the records (this is a cash item that you know about that the bank does not) Talk to your account manager at the bank, along with the person who makes your deposits, to find out where the $9,981.31 went.

As you go through the old bank reconciliation statement and your cash receipts/disbursements lists, you should find one item that increases your cash balance and appears in our records but is not reflected on the bank statement.

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BANK DEPOSITS For the month of August 2004 Day Date Amount

Saturday Wednesday Saturday

August 24 August 28 August 31

10,010.86 7,224.45 11,939.01

In Exhibit 1, there is a late bank deposit dated August 31 for $11,939.01 that has not yet been added to the banks balance. We know about this but the bank does not; therefore, we add it to the banks balance. We record it on the reconciliation as follows: Balance per bank: Bank statement balance, August 31, 2004 Add: Late deposit $ 17,424.04 11,939.01 $ 29,363.05

Subtractions from Banks Records

A reminder ... We need to use our previous bank reconciliation statement as a source of information. There are often outstanding cheques from the previous month that will be cashed early in the month. These outstanding cheques will not appear on our cash disbursements list for the current month; therefore, you may erroneously assume that there is a debit to your bank account that you have not recorded. Sometimes, these cheques may not even be cashed within the current month; therefore, as these are still not reflected in the banks statements, you will still need to deduct this from the banks balance for the current bank reconciliation statement. There are three items in our records that decrease our cash balance and are not recorded on the bank statement: Outstanding cheque, #5210 (from previous reconciliation) Outstanding cheque, #5223 (telephone expense August 15) Outstanding cheque, #5228 (government taxes August 15)

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Item #1 Cheque #5210 Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at July 31, 2004

Balance per bank: Bank statement balance, July 31, 2004 Add: Late deposit Less: Outstanding cheques: #5210 Adjusted cash balance

4,791.89 9,981.31 14,773.20 419.20

$ 14,354.00

This is an outstanding cheque (for $419.20) from the previous month that has yet to be cashed. Even though it was on the previous bank reconciliation, it is a deduction that we know about that the bank does not. As it was done on the bank reconciliation for the previous month, we must deduct this from the banks records: Balance per bank: Bank statement balance, August 31, 2004 Add: Late deposit Less: Outstanding cheques: #5210
Item #2 Cheque #5223 CASH DISBURSEMENTS For the month of August 2004 Date Cheque # Particulars Amount

$ 17,424.04 11,939.01 29,363.05 $ 419.20

August 15

5222 5223 5224

Merchandise payment Telephone Truck repairs

$ 28,362.84 117.94 317.96

This is an outstanding cheque (for $117.94) for telephone expense that has yet to be cashed by the phone company. We have issued the cheque and credited our cash account already, but because the bank knows nothing yet about this cheque, we need to deduct it from the bank balance: Balance per bank: Bank statement balance, August 31, 2004 Add: Late deposit Less: Outstanding cheques: #5210 #5223 $ 419.20 117.94 $ 17,424.04 11,939.01 29,363.05

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Item #3 Cheque #5228 CASH DISBURSEMENTS For the month of August 2004 Date Cheque # Particulars Amount

August 15

5226 5227 5228

Wages, K. Crompton Salaries, J. Tykoliz Government taxes

262.39 1,880.15 3,165.77

This is an outstanding cheque (for $3,165.77) for government taxes that has yet to be cashed by the government. We have issued the cheque and credited our account already, but because the bank knows nothing yet about this cheque, we need to deduct it from the bank balance. Balance per bank: Bank statement balance, August 31, 2004 Add: Late deposit Less: Outstanding cheques: #5210 #5223 #5228 $ 419.20 117.94 3,165.77 $ 17,424.04 11,939.01 29,363.05 3,702.91

Adjusted Cash Balance

We have now recorded all of the items that we know about that the bank did not know. After adding and subtracting all of the adjustments, the adjusted cash balance is $25,660.14. This is the actual amount of cash we have available to us as of August 31, 2004. As you can see in the completed bank reconciliation statement on the next page, the adjusted cash balance from the banks records is equal to the adjusted cash balance we calculated earlier from our records. Since these two are equal, we can be confident that we have reconciled the accounts correctly. Balance per bank: Bank statement balance, August 31, 2004 Add: Late deposit Less: Outstanding cheques: #5210 #5223 #5228 $ 419.20 117.94 3,165.77 $ 17,424.04 11,939.01 29,363.05 3,702.91 $ 25,660.14

Adjusted cash balance

COMPLETED BANK RECONCILIATION

Below you can view the entire bank reconciliation for SCS as at August 31, 2004. The adjusted cash balance is the true cash position of the company on this date, and it is the figure that would appear on the balance sheet for SCS as at August 31, 2004. When preparing the bank reconciliation, small formatting issues are not of major concern. Simply ensure you clearly indicate the adjustments you are making, and try to come as close to this type of format as possible. After you have looked at the full bank reconciliation

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statement, be sure to continue on to check what the adjusting entries should be for SCS at the end of August.
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00 76.76 18.00

Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal NSF cheque Service charge Adjusted cash balance Balance per bank: Bank statement balance, August 31, 2004 Add: Late deposit Less: Outstanding cheques: #5210 #5223 #5228 $

1,457.26 $ 25,660.14 $ 17,424.04 11,939.01 29,363.05

419.20 117.94 3,165.77

3,702.91 $ 25,660.14

Adjusted cash balance

ADJUSTING ENTRIES Adjusting Entries #1 Cash Increases

Always Remember ... With every bank reconciliation you prepare, you will probably have to make adjusting entries to update your records going in to the end of the period. You want to make sure that you record all of the expenses or deductions that you were unaware of before receiving your bank statement before you prepare other financial statements. Remember, all adjusting entries are made in your records, so you want to update your records with the transactions that you did not know about until you received your bank statement. (Notice that, for a bank reconciliation, each adjusting entry includes one debit or credit to the cash account and one corresponding debit or credit to some other account.)

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Finding Items that Require Adjustments

Since you want to record all transactions you hadnt previously recorded, you need to look at the Balance per records section in the bank reconciliation statement to see what you have not yet recorded. It is easy to divide the adjusting entries from a bank reconciliation statement into two transactions: those that increased your cash, and those that decreased your cash. This section will deal with those items that increased your cash. If we look through the balance per records section below, we can highlight one item that we have not recorded on your books:
Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00 76.76 18.00

Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal NSF cheque Service charge Adjusted cash balance

1,457.26 $ 25,660.14

We need to reflect in our accounting records that we have received interest on our bank account. The interest is revenue (not generated by our main line of business); therefore, we must debit Cash (cash increased from receipt of the interest), and credit other revenue or interest revenue (revenue increased when the interest was received). The transaction is recorded as follows: DR CR
Adjusting Entries #2

Cash Other revenue or Interest revenue

49.32 49.32

Since you want to record all transactions you hadnt previously recorded, you need to look at the Balance per records section to see what you have not yet recorded. It is easy to divide the adjusting entries from a bank reconciliation into two transactions: those that increased your cash, and those that decreased your cash. This section will deal with those items that decreased your cash. If we look through the balance per records section below, we can highlight the four items we have not recorded on our books:

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Saskatoon Country Supplies BANK RECONCILIATION STATEMENT As at August 31, 2004

Balance per records: Balance, July 31, 2004 Add: Cash receipts Less: Cash disbursements Balance, August 31, 2004 Add: Credit memo interest earned Less: Debit memos mortgage interest mortgage principal NSF cheque Service charge Adjusted cash balance

$ 14,354.00 72,776.55 87,130.55 60,062.47 $ 27,068.08 49.32 27,117.40 612.50 750.00 76.76 18.00

1,457.26 $ 25,660.14

Individual adjusting entries can be made for each of these four items, or you can make one entry for all of the items since the credit for each of these adjustments will be to cash (they all decreased your cash). Lets first look at each of these items individually.
Item #1 Mortgage Interest

This is a mortgage interest payment that SCS has allowed the bank to automatically deduct each month from its account. Mortgage interest is an expense for SCS. Since this expense is increasing, this would result in a debit entry for $612.50 to Interest Expense; the corresponding credit entry would be to cash (since we paid for the interest in cash -- a reduction). The adjusting journal entry would look like the following: DR CR Interest expense Cash 612.50 612.50

Item #2 Mortgage Principal

This is a principal payment that SCS has allowed the bank to automatically deduct each month from its account. A mortgage is a long-term liability (the principal refers to the base amount of the loan, on which the bank calculates interest); a principal payment will reduce that liability. A reduction in a liability is a debit entry (for $750.00); the corresponding credit entry would be to cash. The adjusting journal entry is: DR CR Mortgage payable Cash 750 750

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Item #3 NSF Cheque

An NSF Cheque indicates that one of our customers cheques has bounced (i.e., they do not have sufficient funds to cover the amount of the cheque at the time). We know that the credit entry for this adjustment is to cash for $76.76 because our cash has decreased as a result of this NSF cheque (When we recorded receipt of the cheque, we increased our cash account.). The customer, Bill Jack, now owes this amount again. He has become a debtor to us; therefore, his account becomes a receivable (i.e., something we are owed). The corresponding debit should be to A/R because our accounts receivable account has now increased. The adjusting journal entry is: DR CR Accounts receivable Cash 76.76 76.76

Item #4 Service Charges

The services charges the bank demands are an expense of doing business for SCS. Since this expense is increasing, we must debit the expense account (e.g., service charges expense or miscellaneous expense) for $18. The corresponding credit is to cash in the same amount. The adjusting journal entry is: DR CR Service charges expense Cash 18.00 18.00

Combining the Four Entries (alternative)

Since the credit for all four entries above is to cash, you can combine all of these entries into one aggregate transaction. To do this, you would debit each account individually, and then credit cash for the sum of all of the debit entries outlined above. As an alternative to the individual entries as shown above, the journal entry and T-Accounts would be adjusted as follows: DR DR DR DR Interest expense Mortgage payable Accounts receivable Service charges expense CR Cash 612.50 750.00 76.76 18.00 1,457.26

FINAL CASH BALANCE

The final cash balance that would appear on the August 31, 2004 would be $25,660.14. This is the adjusted cash balance from the bank reconciliation statement, and now that you have completed the adjusting entries, it is also the balance as of August 31, 2004 reflected in your own accounts.

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TUTORIAL 2 FAQ PAGE

This page contains instructors responses to your common questions. If you want the answer to a question not discussed here, please email your instructor.
Question 2.1:

Why is the late deposit of $9981.31 in the July 31, 2004 bank reconciliation not included in the current August bank reconciliation? I know that the outstanding cheque #5210 is added to the current bank rec, so why is this late deposit not used?
Answer 2.1:

A bank reconciliation is used to correct the books for cheques that have been deposited in the bank but have not cleared the bank. In July, the late deposited cheque for $9,981.31 is included on the bank rec because it is on the books as deposited but has not been taken from the account. Once the cheque clears the bank (see Exhibit 4, Aug 01), no further reconciliation is necessary. Once the cheque has been reconciled in July, and then clears the bank in August, no more consideration for this cheque is necessary. For cheque #5210 ($419.20) on the other hand, it is on the Bank Rec for July because it does not clear the bank by July 31 and then has to be included on the August bank rec again since it does not clear in August either. As you can see from Exhibit 4 again, Cheque #5210 never clears. To make this more easy to understand, a cheque that is on a companys books but has not cleared the bank must be included on the bank rec for as many periods as the cheque remains outstanding on the bank statement. Once the cheque shows up on the bank statement as cleared, it no longer has to be included on the bank rec.
Question 2.2:

There is a deposit listed on our records for August 17 for $8,786.18. It was not recorded on the banks records so I assumed that it would be added to the reconciliation per the banks section. What isnt it?
Answer 2.2:

The August 17th deposit of $8,786.18 that is listed in Exhibit 1, is found on the bank statement in Exhibit 4. This deposit was recorded by the bank on August 19, so it has been recorded on the banks record; terefore, it does not need to be added to the banks portion of the reconciliation.