Answer:
A. Disbursement Float $53,800
Collection Float $47,600
Net Float $6,200
B. Disbursement Float $53,800
Collection Float $23,800
Net Float $30,000
Explanation:
A. Calculation for the company’s disbursement float, collection float, and net float.
Calculation for Disbursement Float using this formula
Disbursement Float = Average amount of check* Time to clear
Let plug in the formula
Disbursement Float= $13,200*4 days
Disbursement Float= $53,800
Calculation for Collection Float
Collection Float =($23,800*2days)
Collection Float = $47,600
Calculation for Net Float using this formula
Net Float = Disbursement Float + collection Float
Let plug in the formula
Net Float= $53,800-$47,600
Net Float= $6,200
Therefore the company’s disbursement float, collection float, and net float will be:
Disbursement Float $53,800
Collection Float $47,600
Net Float $6,200
B.Calculation to determine what would be the company's disbursement float, collection float, and net float If the collected funds were available in one day instead of two
Calculation for Disbursement Float using this formula
Disbursement Float = Average amount of check* Time to clear
Let plug in the formula
Disbursement Float= $13,200*4 days
Disbursement Float= $53,800
Calculation for Collection Float
Collection Float =($23,800*1 days)
Collection Float = $23,800
Calculation for Net Float using this formula
Net Float = Disbursement Float + collection Float
Let plug in the formula
Net Float= $53,800-$23,800
Net Float= $30,000
Therefore what would be the company's disbursement float, collection float, and net float If the collected funds were available in one day instead of two will be:
Disbursement Float $53,800
Collection Float $23,800
Net Float $30,000
