Ellcrys Corp. writes 71 checks a day for an average amount of $537 each. These checks generally clear the bank 3.75 days after they are written. In addition, the firm generally receives 68 checks with an average amount of $622 each. Deposited amounts are available after an average of 3.25 days. Is this a disbursement or collection float? What is the value of the float?

Yes

Disbursement float of $5,515

Explanation:

Yes Based on the information given this a DISBURSEMENT FLOAT

Calculation to determine the value of the float

First step is to calculate the Disbursement float

Disbursement float = 71 × $537 × 3.75 days

Disbursement float = $142,977

Second step is to calculate the Collection float

Collection float = 68 × $622 × 3.25 days

Collection float = $137,462

Now let calculate the value of the float

Value of the float =$142,977 - $137,462

Value of the float = $5,515

Therefore the Value of the float will be $5,515

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