Exercise 4-7 Treatment of NSF check LO 4-2 Montgomery Stationery's bank statement contained a $450 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 Montgomery S470 cash in exchange for the bad check. The additional $20 was a service fee charged by Montgomery. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) MONTGOMERY STATIONERY S Horizontal Statements Model Assets Income Statement Accounts abilities Equity Event Cash Receivable Statement of Cash Flow