hans suppliess bank statement contained a $430 nsf check that one of its customers had written to pay for…

hans suppliess bank statement contained a $430 nsf check that one of its customers had written to pay for supplies purchased. required: a. show the effects of recognizing the nsf check on the financial statements by recording the appropriate amounts in a horizontal financial statements model. also, in the statement of cash flows column, classify the cash flows as operating activities (oa), investing activities (ia), or financing activities (fa). b. suppose the customer redeems the check by giving han $450 cash in exchange for the bad check. the additional $20 paid a service fee charged by han. show the effects on the financial statements. c. is the recognition of the nsf check on hans books an asset source, use, or exchange transaction? d. select which of the following is the correct answer. complete this question by entering your answers in the tabs below. req a and c req b req d is the recognition of the nsf check on hans books an asset source, use, or exchange transaction? is the recognition of the nsf check on hans books an asset source, use, or exchange transaction?

hans suppliess bank statement contained a $430 nsf check that one of its customers had written to pay for supplies purchased. required: a. show the effects of recognizing the nsf check on the financial statements by recording the appropriate amounts in a horizontal financial statements model. also, in the statement of cash flows column, classify the cash flows as operating activities (oa), investing activities (ia), or financing activities (fa). b. suppose the customer redeems the check by giving han $450 cash in exchange for the bad check. the additional $20 paid a service fee charged by han. show the effects on the financial statements. c. is the recognition of the nsf check on hans books an asset source, use, or exchange transaction? d. select which of the following is the correct answer. complete this question by entering your answers in the tabs below. req a and c req b req d is the recognition of the nsf check on hans books an asset source, use, or exchange transaction? is the recognition of the nsf check on hans books an asset source, use, or exchange transaction?

Answer

Explanation:

Step1: Analyze NSF check effect on financial statements (Req A)

When recognizing the NSF check, accounts receivable decreases by $430 and cash (in bank statement - not yet reflected in books) also effectively decreases by $430. In the statement of cash - flows, since it's related to normal business operations of selling supplies, it's an operating activity. Assets (accounts receivable) $\downarrow$ $430$, no effect on liabilities, equity $\downarrow$ $430$ (due to bad - debt expense), and in cash - flows (OA) $\downarrow$ $430$.

Step2: Analyze customer redemption effect (Req B)

The customer gives $450 cash. Cash increases by $450. Accounts receivable (the bad check) decreases by $430 and revenue (service fee) increases by $20. Assets (cash) $\uparrow$ $450$, assets (accounts receivable) $\downarrow$ $430$, no effect on liabilities, equity $\uparrow$ $20$ (due to service revenue), and in cash - flows (OA) $\uparrow$ $450$.

Step3: Determine transaction type (Req C)

The recognition of the NSF check is an asset - use transaction. An asset (accounts receivable) is decreased, and equity is decreased due to the recognition of a bad - debt expense.

Step4: No information for Req D

Since no options are provided for Req D, we can't answer it.

Answer:

a. Assets (accounts receivable) $\downarrow$ $430$, Equity $\downarrow$ $430$ (due to bad - debt expense), Cash - flows (OA) $\downarrow$ $430$. b. Assets (cash) $\uparrow$ $450$, Assets (accounts receivable) $\downarrow$ $430$, Equity $\uparrow$ $20$ (due to service revenue), Cash - flows (OA) $\uparrow$ $450$. c. Asset - use transaction. d. No answer provided as options are missing.