MLX Has Annual Sales of $320 Million Per Year and Has

question 61

Multiple Choice

MLX has annual sales of $320 million per year and has calculated that the collection float is 12 days.If MLX is currently paying 9.35 percent on its line of credit, what amount of interest expense could be saved if the collection float is reduced by 3 days? Assume 365 days per year.

• A)$249,333
• B)$573,808
• C)$299,200
• D)$245,918

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Definitions:

Form 941

A quarterly federal tax form used by employers to report income taxes, social security tax, or Medicare tax withheld from employee's paychecks.

Reconciliation Report

A financial document used to compare and reconcile discrepancies between two sets of records or accounts to ensure their accuracy.

Biweekly

Refers to an event or action occurring every two weeks.

FICA Taxes

Federal Insurance Contributions Act taxes, which are payroll taxes deducted to fund Social Security and Medicare programs.