1. Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

   Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% 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 $21,100. Monthly depreciation is $21,000. Ignore taxes.

   Balance Sheet October 31
   Assets
   Cash	$	25,000
   Accounts receivable		77,000
   Merchandise inventory		162,400
   Property, plant and equipment, net of $624,000 accumulated depreciation		1,026,000
   Total assets	$	1,290,400
   Liabilities and Stockholders' Equity
   Accounts payable	$	239,000
   Common stock		740,000
   Retained earnings		311,400
   Total liabilities and stockholders' equity	$	1,290,400

   The difference between cash receipts and cash disbursements for December would be:

   		$19,200
   		$13,700
   		$38,700
   		$46,600