4.Central Office Supplies is a retail store supplying stationary and other office supplies to small and medium businesses. Information about the store's operation is as follows:

November sales amounted to $500,000

Sales are budgeted at $640,000 for December and $600,000 for January.

• Receipts are expected to be 60% in the month of sale and 37% in the month following the sale. 3% of sales are expected to be uncollectable.
• The store's gross margin is 35% of its sales revenue.
• Other monthly expenses paid in cash amount to $45,200.
• Annual deprecation is $432,000.

Central Office Supplies

Balance Sheet 30 November

Assets:

Cash

$44,000

Accounts receivable (net of $8000 allowance for

uncollectable accounts)

$162,000

Inventory

$280,000

Property, plant and equipment (net of $1180000

accumulated depreciation)

$1,724,000

Total assets

$2,210,000

Liabilities and shareholders' equity

Accounts payable

$334,000

Ordinary shares

$1,590,000

Retained earnings

$286,000

Total liabilities and shareholders' equity

$2,210,000

Required:

a)Prepare cash receipts for December.

b)Prepare budgeted profit (loss) before income tax for December.