Days' cash on hand Financial statement data for years ending December 31 for Newton Company follow: 20Y9 20Y8 Cash (end of year) $25,500 $24,250 Short-term investments (end of year) 8,270 9,460 Operating expenses 60,135 63,780 Depreciation expense 13,225 11,400 Determine the days’ cash on hand for 20Y8 and 20Y9. Assume 365 days in a year. Round all calculations to one decimal place. Days’ Cash on Hand 20Y8: days 20Y9: days

The days' cash on hand in 20Y9 is 262.8 days and  in 20Y8 is 234.9 days.

Operating expenses for 20Y9 = (Operating expenses - Depreciation expense) / 365

Operating expenses for 20Y9 = ($60,135 - $13,225) / 365

Operating expenses for 20Y9 = $46,910 / 365

Operating expenses for 20Y9 = 128.5  

Days cash on hand 20Y9 = (Cash + Short-term investments) / Operating expenses for 20Y9

Days cash on hand 20Y9 = ($25,500 + $8,270) / 128.5

Days cash on hand 20Y9 = $33,770 / 128.5

Days cash on hand 20Y9 = 262.8 days

Operating expenses for 20Y8  = (Operating expenses - Depreciation expense) / 365

Operating expenses for 20Y8 = ($63,780 - $11,400) / 365

Operating expenses for 20Y8  = $52,380 / 365

Operating expenses for 20Y8  = 143.5

Days cash on hand 20Y8 = (Cash + Short-term investments) / Operating expenses for 20Y8

Days cash on hand 20Y8 = ($24,250 + $9,460) / 143.5

Days cash on hand 20Y8 = $33,710 / 143.5

Days cash on hand 20Y8 = 234.9 days

In conclusion, the days' cash on hand in 20Y9 is 262.8 days and  in 20Y8 is 234.9 days.

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Days cash on hand 20Y9 = 262.8 days

Days cash on hand 20Y8 = 234.9 days

Explanation:

The computation of cash on hand is shown below:-

Operating expenses for 20Y9 = Operating expenses - Depreciation expense  ÷ 365

= ($60,135 - $13,225) ÷ 365

= 128.5

Operating expenses for 20Y8  = Operating expenses - Depreciation expense  ÷ 365

= ($63,780 - $11,400) ÷ 365

= 143.5

Days cash on hand 20Y9 = cash + Short-term investments ÷ Operating expenses for 20Y9

$25,500 + $8,270 ÷ 128.5

= 262.8 days

Days cash on hand 20Y8 = cash + Short-term investments ÷ Operating expenses for 20Y8

= ($24,250 + $9,460) ÷ 143.5

= 234.9 days

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