Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:

• Sales are budgeted at $360,000 for November, $330,000 for December, and $310,000 for January.
• Collections are expected to be 90% in the month of sale and 10% in the month following the sale.
• The cost of goods sold is 70% of sales.
• The company desires to have an ending merchandise inventory equal to 70% of the following 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 $25,700.
• Monthly depreciation is $18,000.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	22,000
Accounts receivable		79,000
Inventory		176,400
Property, plant and equipment, net of $507,000 accumulated depreciation		1,012,000
Total assets	$	1,289,400
Liabilities and Stockholders Equity
Accounts payable	$	277,000
Common stock		790,000
Retained earnings		222,400
Total liabilities and stockholders equity	$	1,289,400

The net income for December would be:

Multiple Choice

• $47,200

• $73,300

• $55,300

• $59,300