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Assume the following budgeted information for a merchandising company: Budgeted sales (all on credit) for November, December, and January are $241,000, $211,000, and $202,000, respectively.

Assume the following budgeted information for a merchandising company:

  • Budgeted sales (all on credit) for November, December, and January are $241,000, $211,000, and $202,000, respectively.
  • Cash collections of credit sales are expected to be 75% in the month of sale and 25% in the month following the sale.
  • The cost of goods sold is always 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 $21,500.
  • Monthly depreciation expense is $21,000.

The expected cash collections from customers in December are:

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