Question

The Riley Company has deposited $3,500 in checks received from customers. It has written $1,400 in checks to its suppliers. The initial bank and book balance was $600. If $1,600 of its customers' checks have cleared, but only $600 of its own, calculate its float

Answer 1

$1,100

Step-by-step explanation:

Calculation to determine its float

First step is to calculate the Bank balance

Bank balance = $600 + $1.600 - $600

Bank balance= $1,600

Second step is to calculate the Book balance

Book balance = $600 + $3,500 - $1,400

Book balance= $2,700

Now let calculate the Float using this formula

Float=Book balance -Bank balance

Let plug in the formula

Float=$2,700-$1,600

Float = $1,100

Therefore the float is $1,100