Question

Han’s Supplies’ bank statement contained a $280 NSF check that one of its customers had written...

Han’s Supplies’ bank statement contained a $280 NSF check that one of its customers had written to pay for supplies purchased.

Required

  1. a. & c. Show the effects of the following transactions on the financial statements in the horizontal statements model. (a) Recognize the NSF check, (c) Customer redeems the check by giving Hans $300 cash in exchange for the bad check. The additional $20 was a service fee charged by Hans. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, and FA for financing activity. If the element is not affected by the event, leave the cell blank. (Enter any decreases to account balances and cash outflows with a minus sign.)

Business   Accounting   
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Answer #1
Cash Accounts Receivable Liabilities Retained Earnings Revenue Expenses Net Income Cash Flow
(a) $            (280) $               280 $           (280) OA
(c $             300 $              (280) $               20 $               20 $               20 $             300 OA
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