Cost of goods sold is 60 of sales purchases are made and


Fielding Wilderness Outfitters had projected its sales for the first six months of 2008 to be as follows:

Jan $50,000      April   $180,000

Feb $60,000       May   $240,000

Mar.$100,000     June   $240,000

Cost of goods sold is 60% of sales. Purchases are made and paid for two months prior to the sale. 40% of sales are collected in the month of the sale. 40% are collected in the month following the ale, and the remaining 20% in the second month following the sale. Total other cash expenses are $40,000/month. The company's cash balance as of March 1st 2008 is projected to be $40,000 and the company wants to maintain a minimum cash balance of $15,000. Excess cash will be used to retire short-term borrowing (if any exists). Fielding has no short-term borrowing as of March 1st, 2008. Assume that the interest rate on short-term borrowing is 1% per month, What was Fielding's projected loss for March?

a. $84,000

b. $110,000

c. $184,000

d. none of the above

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Financial Management: Cost of goods sold is 60 of sales purchases are made and
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