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Float for a check deposit.

You have $125,000.00 on deposit with no outstanding checks or uncleared deposits. If you deposit a check for $110,000.00 does this create a disbursement float or a collection float? What is your available balance? Book balance?

Solution Preview

A collection float occurs when you deposit a check that is not cleared immediately. When you receive (and subsequently deposit) a check, the money is not available immediately since the funds need to be transferred from the check writer's account to the check collector's account. In the meantime the amount of the check you deposited is called a collection float. ...

Solution Summary

This problem determines the float for a check deposit.