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Alpha Company budgets its activities for December 2008 based on the following information: - Forecast sales are budgeted at $900,000. All sales are made on
Alpha Company budgets its activities for December 2008 based on the following information: - Forecast sales are budgeted at $900,000. All sales are made on credit and a provision for bad debt is made monthly at the rate of 2% of sales. - Merchandise inventory was $200,000 at November 30, 2008, and the ending inventory is planned to be reduced to $100,000 as at December 31, 2008 - All merchandise selling prices are marked up at invoice cost plus 60%. - Estimated selling and administrative expenses for the month are $100,000. - Budgeted monthly amortization expense is $50,000. Alpha would project operating income for December 2008 in the amount of: a $119,000. b. $129,000. c. $169,500 d. $230,000
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