Rankin Stationery's bank statement contained a $250 NSF check that one of its customers had written to

Question:

Rankin Stationery's bank statement contained a $250 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 statements model like the following one:

b. Is the recognition of the NSF check on Rankin's books an asset source, use, or exchange transaction?
c. Suppose the customer redeems the check by giving Rankin $270 cash in exchange for the bad check. The additional $20 was a service fee charged by Rankin. Show the effects on the financial statements in the horizontal statements model in Requirement a.
d. Is the receipt of cash referenced in Requirement c an asset source, use, or exchangetransaction?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...