Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $430,000 for November, $410,000 for December, and $400,000 for January.
• Collections are expected to be 60% in the month of sale and 40% in the month following the sale.
• The cost of goods sold is 85% of sales.
• The company would like to maintain ending merchandise inventories equal to 75% 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 $24,900.
• Monthly depreciation is $15,900.
• Ignore taxes.

Balance Sheet

October 31AssetsCash$20,900Accounts receivable70,900Merchandise inventory274,125Property, plant and equipment, net of $572,900 accumulated depreciation1,094,900Total assets$1,460,825Liabilities and Stockholders' EquityAccounts payable$254,900Common stock820,900Retained earnings385,025Total liabilities and stockholders' equity$1,460,825

The cost of December merchandise purchases would be:

Garrison 16e Rechecks 2017-10-03, 2018-07-24

Multiple Choice

• $365,500
• $255,000
• $342,125
• $348,500