A company has the following cash balances: Companys ledger balance = $600,000 Banks ledger balance = $625,000

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A company has the following cash balances: Company’s ledger balance = $600,000 Bank’s ledger balance = $625,000 Available balance = $550,000

a. Calculate the payment float and availability float.

b. Why does the company gain from the payment float?

c. Suppose the company adopts a policy of writing cheques on a remote bank. How is this likely to affect the three measures of cash balance?

Related Book For answer-question

Principles of Accounting

ISBN: 978-1133626985

12th edition

Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson

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Posted Date: Dec 31, 2020 08:16 AM

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A company has the following cash balances: Companys ledger balance = $600,000 Banks ledger balance = $625,000

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a Availability float is the time duration that exists when a deposit is made when ... View the full answer

Principles of Accounting

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