On January 25, Coot Company has $250,000 deposited with a local bank. 
On January 27, the company writes and mails checks of $20,000 and
$60,000 to suppliers.  At the end of the month, Coot?s financial
manager deposits a $45,000 check received from a customer in the
morning mail and picks up the end-of-month account summary from the
bank.  The manager notes that only the $20,000 payment of the 27th has
cleared the bank.

a.What are the company?s ledger balance and payment float?  
b.What is the company?s net float?

The company starts with $250,000.  It writes two checks totaling
$80,000 and receives a check in the amount of $45,000.

The company's ledger balance equals $250,000 - $80,000 + $45,000 or
$215,000.  Because only one check in the amount of $20,000 has
cleared, the company has a payment float of $60,000.  Because the
company has not yet received the cash from the check deposited at the
end of the month, the company's net float equals $60,000 - $45,000 or
$15,000.

Sincerely,

Wonko