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borteleto borteleto
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Posts: 2477
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5 years ago
CraftCo, Inc.'s projected sales for the first six months of 2012 are given below:

Jan.$500,000April$490,000
Feb.$740,000May$740,000
Mar.$380,000June$610,000

40% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Cost of goods sold is 60% of sales. Purchases are made in the month prior to the sales, and payments for purchases are made in the month of the sale. Total other cash expenses are $40,000/month. The company's cash balance as of February 28, 2012 will be $25,000. Excess cash will be used to retire short-term borrowing (if any). CraftCo, Inc. has no short term borrowing as of February 28, 2012. Assume that the interest rate on short-term borrowing is 1% per month. The company must have a minimum cash balance of $15,000 at the beginning of each month. What is CraftCo, Inc.'s projected cash balance at the end of March 2012?
A) $301,000
B) $329,000
C) $352,000
D) $361,000
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DeanaRayDeanaRay
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borteleto Author
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5 years ago
Thanks
DAGINC
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Yesterday
Smart ... Thanks!
jmendoza
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2 hours ago
Helped a lot
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