Assume the following budgeted information for a merchandising company:

$-$Budgeted sales $($all on credit$)$ for November, December, and January are $$250,000,$$$220,000,$ and $$200,000,$ respectively.

$-$Cash collections related to credit sales are expected to be $75\%$ in the month of sale, $25\%$ in the month following the sale.

$-$The cost of goods sold is $65\%$ of sales.

$-$Each month's ending inventory equals $20\%$ of next month's cost of goods sold.

$-40\%$ of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month.

$-$Monthly selling and administrative expenses that are paid in cash in the month incurred total $$20,500.$

$-$Monthly depreciation expense is $$20,000.$

The budgeted net operating income for December would be:

Multiple Choice

$$28,180$

$$56,500$

$$48,180$

$$36,500$

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