Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $307,000 for November, $327,000 for December, and $227,000 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 75% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 90% 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 $22,800. Monthly depreciation is $29,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 35,000 Accounts receivable 85,500 Merchandise inventory 290,400 Property, plant and equipment, net of $624,000 accumulated depreciation 922,000 Total assets $ 1,332,900 Liabilities and Stockholders' Equity Accounts payable $ 256,000 Common stock 757,000 Retained earnings 319,900 Total liabilities and stockholders' equity $ 1,332,900.

Expected cash collections in December are: