Balance sheet and other cash information for International Gourmet Foods is presented below.

Sales are budgeted at $400,000 for November, $380,000 for December, and $370,000 for January.

Collections are expected to be 405% in the month of sale and 55% in the month following the sale.

The cost of goods sold is 75% of sales.

The company would like to maintain ending merchandise inventories equal to 65% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.

Other monthly expenses to be paid in cash are $24,600.

Monthly depreciation is $15,600.

Ignore taxes.

Balance Sheet October 31

Assets

Cash $ 20,600

Accounts receivable 70,600

Merchandise inventory 195,000

Property, plant and equipment, net of $572,600 accumulated depreciation 1,094,600

Total assets $ 1,380,800

Liabilities and Stockholders' Equity

Accounts payable $ 254,600

Common stock 820,600

Retained earnings 305,600

Total liabilities and stockholders' equity $ 1,380,800

The difference between cash receipts and cash disbursements for December would be:

1. 76,150

2. 57, 113

3. 38,475

4. 120,600