Days' cash on hand Financial statement data for years ending December 31 for Newton Company follow: 20Y9 20Y8 Cash (end of year) $25,720 $24,945 Short-term investments (end of year) 8,200 9,420 Operating expenses 60,020 64,325 Depreciation expense 13,300 11,400 Determine the days' cash on hand for 20Y8 and 20Y9. Assume 365 days in a year.

Question

Business

Honey Pie

13 October, 16:19

Days' cash on hand Financial statement data for years ending December 31 for Newton Company follow: 20Y9 20Y8 Cash (end of year) $25,720 $24,945 Short-term investments (end of year) 8,200 9,420 Operating expenses 60,020 64,325 Depreciation expense 13,300 11,400 Determine the days' cash on hand for 20Y8 and 20Y9. Assume 365 days in a year.

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Answers (1)

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Maxim Bolton · Answer 1

The correct answer is 265 Days and 237 Days.

Explanation:

According to the scenario, m the computation of the given data are as follows:

First we calculate the Days cash on hand by using following formula:

Days cash on hand = Cash and cash equivalent : [ (operating expenses - Depreciation expense) : 365 ]

So, For the year 20Y8

Days Cash on hand = ($25,720 + $8,200) : [ ($60,020 - $13,300) : 365]

= $33,920 : 128

= 265 days

So, For the year 20Y9

Days Cash on hand = ($24,945 + $9,420) : [ ($64,325 - $11,400) : 365]

= $34,365 : 145

= 237 days