Assume a merchandising company provides the following information from its master budget for the month of May:

Sales

Cash paid for merchandise purchases

Selling and administrative expenses

Accounts payable, May $1^{st}$

Accounts payable, May ${31}^{st}$

$$135,000$

$$89,000$

$$29,000$

$$22,500$

$$30,000$

If the company maintains no beginning or ending merchandise inventory and makes all of its inventory purchases on account, what is the budgeted net operating

income for May?

Multiple Choice

$$39,500$

$$30,000$