23) Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $299,000 for November, $319,000 for December, and $219,000 for January Collections are expected to be 65% in the month of sale and 35% in the month following the sale The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase Other monthly expenses to be paid in cash are $22,000 Monthly depreciation is $25,500. Ignore taxes at the end of Balance Sheet October 31 Assets $ Cash 32,500 Accounts receivable 81,500 Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation 167,440 1,013,000 1.294,440 Total assets $ Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 248,000 749,000 297,440 Total liabilities and stockholders' equity 1,294,440 The cost of December merchandise purchases would be: B) $255,200 D) $199,200 A) $122,640 C) $239,200