Central Office Supplies is a retail store supplying stationary and other office supplies to small and medium businesses. Information about the store's operation is as follows:

November sales amounted to $400,000

Sales are budgeted at $440,000 for December and $400,000 for January.

• Receipts are expected to be 60 per cent in the month of sale and 38 per cent in the month following the sale. Two per cent of sales are expected to be uncollectable.
• The store's gross margin is 25 per cent of its sales revenue.
• A total of 80 per cent of the merchandise for resale is purchased in the month prior to the month of sale, and 20 per cent is purchased in the month of sale. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses paid in cash amount to $45,200.
• Annual deprecation is $432,000.

Central Office Supplies

Balance Sheet 30 November

Assets:

Cash

$44,000

Accounts receivable (net of $7000 allowance for

uncollectable accounts)

$152,000

Inventory

$280,000

Property, plant and equipment (net of $1180000

accumulated depreciation)

$1,724,000

Total assets

$2,200,000

Liabilities and shareholders' equity

Accounts payable

$324,000

Ordinary shares

$1,590,000

Retained earnings

$286,000

Total liabilities and shareholders' equity

$2,200,000

Required:

1. Prepare cash receipts for December

[Answer and show workings here]

1. Prepare budgeted profit (loss) before income taxes for December

[Answer and show workings here]