Budgeted sales (all credit) for November, December, and January are $250,000, $210,000, and $200,000, respectively.

Cash collections of sales are expected to be 75% In the month of sale and 23% in the month following the sale.

The remainder of the sales is expected to be uncollectable.

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 months.

Monthly selling and administrative expenses that are paid in cash in the month incurred a total of $21,500.

Monthly depreciation expense is $20,000.

Dividends of $5,000 to be declared in December and paid in January.

What is the expected net operating income for December?

a. $42,800

b. $32,000

c. $52,000

d. $27,800