Next, consider the case of Windsor Flooring Company:The management at Windsor Flooring has determined that it takes an average of 8 days for checks the company writes to clear its bankaccount. Cash receipts from customers are reflected in Windsor's bank account an average of 2 days after the checks are received. Onan average day, Windsor writes checks that total $10,000, and it receives checks from customers that total $20,000.Compute the collection float, the disbursement float, and the net float in dollars in the following table. (Note: By definition, collection float is alwaysconsidered negative, and disbursement float is always positive. Both should be shown as positive numbers here. The net float, however, should beshown as positive if it is favorable and as negative if it is unfavorable.)Windsor Flooring CompanyFloat CalculationsCollection floatDisbursement floatNet floatGiven this information, you can deduce that on an average day, Windsor Flooring's bank balance isits book balance. 6. Check clearing and the use of floatFloat is defined as the difference between the balance shown on the books and the balance in the bank account. A lag often occurs between the timereceipts and disbursements are recorded on the company's books and when the transactions clear the bank.The accountant for Sandberg Window and Glass Co. has determined that it takes, on average, four days from the date payments are mailed to whenthey clear the company's account.What type of float does this scenario describe?Net floatCollection floatDisbursement float

A collection float is when a check is received but has not been reflected in the bank statement. A…

Answered: Next, consider the case of Windsor…

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

See similar textbooks

Similar questions

A customer in a bank has made a balance withdrawal transaction in the last 30 days. In the last 28 days, the customer routinely made cash withdrawals of $100000. In the last two days, this customer made a withdrawal amounting to$7500000 and $5000000. Based on the transaction data, which value is the most appropriate to describe the central tendency of the distribution of customer cash withdrawal data? a) $510000 b) $100000 c) $275000 d) $426000
The beginning checkbook balance of Shamma Co. was $5,559.10. The bank statement showed a bank balance of $7,888.44. The bookkeeper of Shamma Co. noticed a $111.10 deposit in transit along with check numbers 90 and 97 for $499.88 and $1,256.45, respectively, as outstanding. The bank statement credited Shamma's account for $750.99 for a note collected. The bank statement revealed a check printing charge of $66.88. The reconciled balance is:
You are the accountant for Georgia Company, and you have recently received the bank statement for your company's account and need to reconcile it with your general ledger cash account. Georgia's records show an ending balance for the month of $12,802.40 while the bank's records show an ending balance of $12,573.76. The bank charged $7.50 in service fees and paid $26.15 in interest. All but three checks written during the month were processed by the bank without incident during the month. The three exceptions were: • Check # 841 was correctly processed by the bank as $841.27 but was mistakenly recorded by you as $741.27. Check #853 for $70.57 had not yet been processed by the bank. • Check #855 for $723.46 had not yet been processed by the bank. All but two of the deposits made during the month were processed by the bank without incident. The two exceptions were: • A customer check for $321.95, which had been deposited during the month, was returned NSF. • A deposit totaling $619.37 had…
Modos Company has deposited $4,080 in checks received from customers. It has written $1,540 in checks to its suppliers. The initial bank and book balance was $430. If $3,550 of its customers' checks have cleared, but only $420 of its own, calculate its float.
Next, consider the case of Washburn Flooring Company: The management at Washburn Flooring has determined that it takes an average of 6 days for checks the company writes to clear its bank account. Cash receipts from customers are reflected in Washburn's bank account an average of 2 days after the checks are received. On an average day, Washburn writes checks that total $40,000, and it receives checks from customers that total $50,000. Compute the collection float, the disbursement float, and the net float in dollars in the following table. (Note: By definition, collection float is always considered negative, and disbursement float is always positive. Both should be shown as positive numbers here. The net float, however, should be shown as positive if it is favorable and as negative if it is unfavorable.) Washburn Flooring Company Float Calculations Collection float Disbursement float Net float Given this information, you can deduce that on an average day, Washburn Flooring's bank…
Brangelina Adoption Agency's general ledger shows a cash balance of $4,586. The balance of cash in the March-end bank statement is $7,331. A review of the bank statement reveals the following information: checks outstanding of $2,796, bank service fees of $78, and interest earned of $27. Calculate the correct balance of cash at the end of March. (Amounts to be deducted should be indicated with a minus sign.)
Bourne Incorporated reports a cash balance at the end of the month of $2,620. A comparison of the company's cash records with the monthly bank statement reveals several additional cash transactions: bank service fees ($85), an NSF check from a customer ($350), a customer’s note receivable collected by the bank ($1,000), and interest earned ($35). Required: Record the necessary entries to adjust the balance of cash.
Carl Roen had a balance of $1,700 in his checking account at First National Bank on a day when the bank received the following five checks for processing against his account. Check Number Check Amount Number Amount 3150 $135 3165 $750 3162 400 3166 1,710 3169 380 Assuming a $130 fee assessed by the bank for each bounced check, how much fee revenue would the bank generate if it processed checks (1) from largest to smallest, (2) from smallest to largest, and (3) in order of check number? Fee revenue (1) Largest to smallest $ so (2) Smallest to largest $ 30 (3) In order of check number $ 60
Safe Security Doors Ltd. undertakes bank reconciliation at the end of each month before preparing its monthly financial statements. The following information is produced by comparing the cash deposits and withdrawals recorded by the business in July with their bank statement received for the month ending 31 July 2021: The bank statement for the month of July shows a credit balance of $112,250 as at 31 July 2021. Safe Security Doors Ltd.’s cash at bank ledger account has a debit balance of $109,230 at 31 July 2021. $7,850 cash received from a customer Adam on 30 July (invoice no. 211) and $11,045 cash received from another customer Brian on 31 July (invoice no. 213) are recorded in the entity’s accounting record but are not shown in the bank statement. Interest earned on bank account is $85. Cheque no. 112 and 113 are not included in the bank statement. # 112 $ 8,045 # 113 $ 6,950 Bank deducted transaction fees of $15 for an overseas transfer by the entity. Safe Security Doors…
The Cash account of Gate City Security Systems reported a balance of $2,490 at December 31, 2024. There were outstanding checks totaling $1,000 and a December 31 deposit in transit of $300. The bank statement, which came from Tri Cities Bank, listed the December 31 balance of $3,810. Included in the bank balance was a collection of $630 on account from Nicole Lee, a Gate City customer who pays the bank directly. The bank statement also shows a $20 service charge and $10 of interest revenue that Gate City earned on its bank balance. Prepare Gate City's bank reconciliation at December 31. Gate City Security Systems Bank Reconciliation December 31, 2024 Bank: Balance, December 31, 2024 ADD: LESS Adjusted bank balance, December 31, 2024 Book: Balance, December 31, 2024 ADD: LESS Adjusted book balance, December 31, 2024
Alvin Electronics is in the process of reconciling its bank account for the month of November. The following information is available: Balance per bank statement $ 8,325 Outstanding checks 2,400 Deposits outstanding 1,215 Bank service charges for November 35 Check written by Alvin for $300 but recorded incorrectly by Alvin as a $30 disbursement. What should be the corrected cash balance at the end of November?
Please provide Answer in text Format

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS