Compute Decembers budgeted net operating income for Alexander Company based on the following data.

All budgeted sales are on credit for November, December, and January. Budgeted sales amounts are $250,000, $270,000, and $300,000, respectively for November, December, and January.

Cash collections related to credit sales are expected to be 70% in the month of sale, and 30% in the month following the sale.

Cost of goods sold is estimated at 45% of sales.

Each months ending inventory should equal 20% of next months cost of goods sold.

40% of each months merchandise purchases are paid in the current month and the remainder is paid in the following month.

Monthly selling and administrative expenses that are paid for using cash total $34,000.

Monthly depreciation expense is $10,000.