Han's Supplies's bank statement contained a $260 NSF check that one of its customers had written to pay for supplies purchased. Required: 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 $280 cash in exchange for the bad check. The additional $20 was a service fee charged by Hans. Note: Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or leave the cell blank if there is no effect. HAN'S SUPPLIES Horizontal Statements Model Balance Sheet Income Statement Event Assets Statement of Cash Cash Accounts Receivable Liabilities Equity Revenue Expense =Net Income Flows (a) (c)

Han's Supplies's bank statement contained a $260 NSF check that one of its customers had written to pay for supplies purchased. Required: 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 $280 cash in exchange for the bad check. The additional $20 was a service fee charged by Hans. Note: Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or leave the cell blank if there is no effect. HAN'S SUPPLIES Horizontal Statements Model Balance Sheet Income Statement Event Assets Statement of Cash Cash Accounts Receivable Liabilities Equity Revenue Expense =Net Income Flows (a) (c)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter5: Internal Control And Cash

Section: Chapter Questions

Problem 2SEQ

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Question

Han's Supplies's bank statement contained a $260 NSF check that one of its customers had written to pay for supplies purchased.
Required:
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 $280 cash in exchange for the bad check. The additional $20 was a
service fee charged by Hans.
Note: Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether
the item is an operating activity (OA), investing activity (IA), financing activity (FA), or leave the cell blank if there is no effect.
Event
(a)
(c)
HAN'S SUPPLIES
Horizontal Statements Model
Balance Sheet
Income Statement
Assets
Cash
+
Accounts
Receivable
Liabilities
+ Equity
Revenue
Expense
Net Income
Statement of Cash
Flows

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Han's Supplies' bank statement contalned a $320 NSF check that one of Its customers had written to pay for suppliles purchased. Required a. Show the effects of recognizing the NSF check on the financial statements by recording the appropriate amounts In a horizontal statements model. b. Is the recognition of the NSF check on Han's books an asset source, use, or exchange transaction? c. Suppose the customer redeems the check by glving Han's $335 cash in exchange for the bad check. The additional $15 pald a service fee charged by Han's. Show the effects on the financial statements in the horizontal statements model. d. Is the recelpt of cash referenced In Requirement c an asset source, use, or exchange transaction? e. Record in general journal form the adjusting entry for the NSF check and the entry for redemption of the check by the customer.
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