Each business day, on average, a company writes checks totaling $41,000 to pay its suppliers. The usual clearing time for the checks is three days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $52,000. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. Calculate the company's disbursement float, collection float, and net float, if the collected funds were available in one day instead of two. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

Each business day, on average, a company writes checks totaling $41,000 to pay its suppliers. The usual clearing time for the checks is three days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $52,000. The cash from the payments is available to the firm after two days. a. Calculate the company's disbursement float, collection float, and net float. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. Calculate the company's disbursement float, collection float, and net float, if the collected funds were available in one day instead of two. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Company Deli writes checks averaging P30,000 per day that require 4 days to clear. By what amount will its book balance be less than its bank balance? a. P30,000.00b. P60,000.00c. P90,000.00d. P120,000.00e. P150,000.00
If Service World has $1,950 cash, $400 of government Treasury bills purchased last month with a six-week maturity, and $940 of cash set aside for legal reasons, how much will the company report on the balance sheet as “Cash and Cash Equivalents”?
Fred's Supply's month end bank statement shows a balance of $32,000. Outstanding checks were $10,000, and the $5,000 deposit on the last day of the month is not yet shown on the bank statement since it was made after 4 p.m. Bank service fees of $35 and a returned check (NSF) of $49 were shown on the statement are not yet recorded on the books. What is the correct (reconciled) month-end cash amount? Respond in a whole number, no commas and no dollar signs.
Best Exports has noticed their current year net income is only $60,000. In order to get a loan from their bank to assist the business they will need to provide a statement of cash flows. In reviewing the statement of cash flows, you notice a large increase ($80,000) in accounts receivable due to two of your largest customers being behind in payments. Since the bank looks at the operating activities, this increase will create concern. You make a suggestion to reclassify the accounts receivables to long-term, thus removing them from current assets will increase the net cash from operations. Under what circumstances would this reclassification be considered ethical or unethical? Support your selection by finding an article which explains your choice.
Winnie Company showed a cash account balance of Php 5,000,000 at the month-end. The bank statement did not include a deposit of Php 300,000 made on the last day of the month. The bank statement showed a collection by the bank of Php 100,000 for the depositor and a customer check for Php 45,000 returned because it was NSF. A customer check for Php 57,000 was recorded by the depositor as Php 75,000 and a check written for Php 58,000 was recorded as Php 85,000. What amount should be reported as cash in bank?
Baghiben
Epsilon Corporation has unadjusted cash in bank balances of P1,000,000 and P900,000 at the beginning and end of the month, respectively. Book debits totaled P1,800,000. An analysis with recent bank statements showed deposits in transit of P350,000 at the start of the month, deposits in transit of P220,000 at the end of the month, outstanding checks of P80,000 at the beginning of the month, and outstanding checks of P70,000 at the end of the month. Credit memos were P200,000 last month while it is P50,000 for this month. Bank service charge totaled P30,000 last month. A P120,000 customer check deposited this month was returned by the bank due to insufficient fund. How much is the unadjusted total bank credit for the month?
Your neighbor goes to the post office once a month and picks up two checks, one for $13,000 and one for $3,000. The larger check takes 2 days to clear after it is deposited; the smaller one takes 4 days. Assume 30 days per month. 1. What is the total float for the month? 2. What is the average daily float? 3a. What is the average daily receipts? 3b. What is the weighted average delay?
Madison Corner writes 29 checks a day for an average amount of $493 each. These checks generally clear the bank 2.75 days after they are written. In addition, the firm generally receives 66 checks with an average amount of $556 each. Deposited amounts are available after an average of 2.25 days. What is the amount of the firm's collection float? Multiple Choice $82,566 $43,249 $39,317 $36,696 $14,297

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