27.

Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: o Sales are budgeted at $486,000 for November, $496,000 for December, and $506,000 for January. o Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible. o The cost of goods sold is 85% of sales. o The company desires to have an ending merchandise inventory equal to 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $32,700. o Monthly depreciation is $15,000. o Ignore taxes.

Balance Sheet October 31
Assets
Cash	$ 19,100
Accounts receivable, net of allowance for uncollectible accounts	83,100
Inventory	232,500
Property, plant and equipment, net of $546,000 accumulated depreciation	1,092,000
Total assets	$1,426,700
Liabilities and Stockholders' Equity
Accounts payable	$ 287,000
Common stock	780,000
Retained earnings	359,700
Total liabilities and stockholders' equity	$1,426,700

The cash balance at the end of December would be:

$67,520

$19,100

$148,520

$129,420