Brenda Small manages Harris Manufacturing. Small fears that a trusted employee has been stealing from the company. This employee receives cash from clients and also prepares the monthly bank reconciliation. To check up on the employee, Small prepares her own bank reconciliation, as follows:

Does it appear that the employee has stolen from the company? If so, how much? Explain your answer. Which side of the bank reconciliation shows the company€™s true cashbalance?

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Harris Manufacturing Bank Reconciliation October 31, 2012 Bank Books Balance, October 31 Add $4,150 Balance, October 31 $3,980 Add 300 Bank collections 450 35 Deposits in transit Interest revenue Less: Less Outstanding checks Adjusted bank balance (760)Service charge (65) $3,690 Adjusted book balance $4,400