Question

Days’ cash on hand Financial statement data for years ending December 31 for Newton Company follow:...

Days’ cash on hand

Financial statement data for years ending December 31 for Newton Company follow:

20Y9 20Y8
Cash (end of year) $25,400 $24,100
Short-term investments (end of year) 7,670 9,770
Operating expenses 59,245 63,765
Depreciation expense 12,880 10,840

Determine the days’ cash on hand for 20Y8 and 20Y9. Assume a 365-day year. Round your answers to one decimal place.

Days’ Cash on Hand
20Y8: days
20Y9: days

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Days' Cash on Hand = (Cash and Short-Term Investments) ÷ [(Operating Expenses - Depreciation Expense) ÷ 365] to obtain the ratio.

I need the number of days for 20Y8 & 20Y9?

Homework Answers

Answer #1
Answer:
20Y9 20Y8
Days Cash on hand
(Cash and Short-Term Investments) /
[(Operating Expenses (-) Depreciation Expense) ÷ 365]
( $ 25,400 + $ 7,670) / ( $ 59,245 (-) $ 12,880 ) / 365
            = $ 33,070 x 365 / $ 46,365
            =   260.3 days
( $ 24,100 + $ 9,770) / ( $ 63,765 (-) $ 10,840 ) / 365
            = $ 33,870 x 365 / $ 52,925
            =   233.6 days
Days Cash on hand 260.3 days (or) 260.4 days 233.6 days
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