Southern Meals generally receives four checks a month. One of the checks is for $569 and has a collection delay of three days. The others amounts are $1,318, $907, and $113 and have a one-day delay. Given this information, what is the amount of the average daily float? Assume each month has 30 days.

Question

Quizplus · Accepted Answer

The average daily float is the sum of the float for each check divided by the number of days in a month. The float for each check is the amount of the check multiplied by the collection delay. The total float is $569 * 3 + $1,318 * 1 + $907 * 1 + $113 * 1 = $4,220. The average daily float is $4,220 / 30 = $140.67.

Southern Meals Generally Receives Four Checks a Month