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6 October, 23:42

Given the following balance sheet and income statement data for the year ended December 31, what is the final figure for the numerator in the formula for the days' cash on hand? Cash $300,000 Short-term investments 400,000 Accounts receivable 900,000 Total operating expenses 640,000 Depreciation expense 140,000 a. $1,600,000 b. $500,000 c. $300,000 d. $700,000

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  1. 7 October, 02:36
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    Option (d) is correct.

    Explanation:

    Given that,

    Cash = $300,000

    Short-term investments = 400,000

    Accounts receivable = 900,000

    Total operating expenses = 640,000

    Depreciation expense = 140,000

    The numerator part in the formula of days' cash on hand is cash and cash equivalents available.

    Cash and cash equivalents available:

    = Cash + Short term investments

    = $300,000 + $400,000

    = $700,000
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