The BDF Co. receives ﬁve cheques per month, each month. The payments and clearing times are: $4,000, two days; $6,000, two days; $3,000, ﬁve days; $8,000, three days, and $7,000, four days.
Assume a 360-day year.
What are the average daily receipts?

Question

Quizplus · Accepted Answer

To find the average daily receipts, we need to first calculate the total amount received in a month and divide it by the number of days in a month.

Total amount received in a month = $4,000 + $6,000 + $3,000 + $8,000 + $7,000 = $28,000

Total clearing time in a month = 2 days + 2 days + 5 days + 3 days + 4 days = 16 days

Average clearing time for a cheque = Total clearing time / Number of cheques = 16 days / 5 = 3.2 days

Adjusted collection float (ACF) = ((Total amount received in a month) / 360) x Average clearing time for a cheque = ($28,000 / 360) x 3.2 = $2,222.22

Average daily receipts = (Total amount received in a month - ACF) / Number of days in a month = ($28,000 - $2,222.22) / 30 = $933.33

Therefore, the answer is D) $933.33.