Spice It Up! Writes 57 Checks a Day with an Average

question 62

Multiple Choice

Spice it Up! writes 57 checks a day with an average amount of $289 each.These checks generally clear the bank in 2.7 days.In addition, the firm generally receives an average of $20,900 a day in checks that are deposited immediately.Deposited funds are available in an average of .5 days.What is the firm's net float?

• A)Net disbursement float of $36,318
• B)Net disbursement float of $34,027.10
• C)Net disbursement float of $34,750.30
• D)Net collection float of $36,318
• E)Net collection float of $34,027.10

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Definitions:

Depreciation Expense

This refers to the allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up during a fiscal period.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was put into service.

Straight-line Method

An accounting method for calculating depreciation by evenly distributing the cost of an asset over its useful life.

Residual Value

The estimated remaining value of an asset at the end of its useful life.