Question

You have $138,000 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $46,000.

a.	Does this create a disbursement float or a collection float?
b.	What is your available balance? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
c.	What is your book balance? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
	a. Type of float= b. Available balance= c. Book balance=

Answer 1

A) Writing a check will create a disbursement float as it will take a certain amount of time for the check to clear .

B) The available balance will be $ 138000.

After writing a check the available balance will still be the same as it will take some time for the check to clear. So it will take some time for money to be deducted from available balance

C) The book balance is $ 92000

The book balance will be $138000 - $46000= $ 92000. The bank will deduct the amount from its book as soon as the check is written