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

• Sales are budgeted at $254,000 for November, $294,000 for December, and $221,000 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 80% 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 $15,600.
• Monthly depreciation is $26,500.
• Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$ 32,000
Accounts receivable	82,500
Merchandise inventory	287,400
Property, plant and equipment, net of $624,000 accumulated depreciation	916,000
Total assets	$ 1,317,900
Liabilities and Stockholders' Equity
Accounts payable	$ 250,000
Common stock	751,000
Retained earnings	316,900
Total liabilities and stockholders' equity	$ 1,317,900

Expected cash collections in December are: