Show the effects of recognizing the NSF check on the financial statements by recording the…


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Show the effects of recognizing the NSF check on the financial statements by recording the… 1 answer below » Treatment of NSF check The bank statement of Gear Supplies included a $300 NSF check that one of Gear’s customers had written to pay for services that were provided by Gear. Required a. Show the effects of recognizing the NSF check on the financial statements by recording the appropriate amounts in a horizontal statements model like the following one. View complete question » Assets = Liab. + Equity Rev. – Exp. = Net Inc. Cash Flow Cash + Accts. Rec. Treatment of NSF check The bank statement of Gear Supplies included a $300 NSF check that one of Gear’s customers had written to pay for services that were provided by Gear. Required a. Show the effects of recognizing the NSF check on the financial statements by recording the appropriate amounts in a horizontal statements model like the following one. Assets = Liab. + Equity Rev. – Exp. = Net Inc. Cash Flow Cash + Accts. Rec. b. Is the recognition of the NSF check on Gear’s books an asset source, use, or exchange transaction? c. Suppose the customer redeems the check by giving Gear $325 cash in exchange for the bad check. The additional $25 paid a service fee charged by Gear. Show the effects on the financial statements in the horizontal statements model in Requirement a. d. Is the receipt of cash referred to in Requirement c an asset source, use, or exchange transaction? View less » Jul 24 2014 07:51 AM

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