Fielding Wilderness Outfitters Had Projected Its Sales for the First

question 98

Multiple Choice

Fielding Wilderness Outfitters had projected its sales for the first six months of 2010 to be as follows: 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 sale,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,2010 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,2010.Assume that the interest rate on short-term borrowing is 1% per month.What is Fielding's projected total receipts (collections) for April?

• A)$124,000
• B)$180,000
• C)-$4,000
• D)$36,000

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