Rawhide Outfitters Had Projected Its Sales for the First Six

question 104

Multiple Choice

Rawhide Outfitters had projected its sales for the first six months of 2012 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,2012 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,2012.Assume that the interest rate on short-term borrowing is 1% per month.How much short term financing is needed by March 30,2012?

• A)$110,000
• B)$15,000
• C)$70,000
• D)$85,000

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Definitions:

Western Portrait

A genre of painting that originated in the Western world, focusing on the depiction of an individual or group’s appearance and personality.

Jan van Eyck

A Northern Renaissance artist known for his detailed panel paintings and mastery of oil painting techniques, including the Ghent Altarpiece.

Revelations

A book of the New Testament of the Christian Bible, traditionally called the Book of Revelation or Apocalypse, which contains prophetic visions of the end times.

Ghent Altarpiece

A large and complex 15th-century polyptych altarpiece in St Bavo's Cathedral, Ghent, Belgium, attributed to the brothers Hubert and Jan van Eyck.