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).The firm has no short-term borrowing as of March 1st,2012.Assume that the interest rate on short-term borrowing is 1% per month.What was Rawhides' projected loss for March?

Question

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).The firm has no short-term borrowing as of March 1st,2012.Assume that the interest rate on short-term borrowing is 1% per month.What was Rawhides' projected loss for March?

Quizplus · Accepted Answer

There is not enough information provided to calculate Rawhide Outfitters' projected loss for March. The given information only pertains to sales projections and cash flow management, and there is no indication of any unexpected expenses or losses. Therefore, the projected loss for March cannot be determined based on the given information.

Rawhide Outfitters Had Projected Its Sales for the First Six