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

• Sales are budgeted at $304,000 for November, $324,000 for December, and $224,000 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 $22,500.
• Monthly depreciation is $28,000.
• Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$ 33,500
Accounts receivable	84,000
Merchandise inventory	205,200
Property, plant and equipment, net of $624,000 accumulated depreciation	919,000
Total assets	$ 1,241,700
Liabilities and Stockholders' Equity
Accounts payable	$ 253,000
Common stock	754,000
Retained earnings	234,700
Total liabilities and stockholders' equity	$ 1,241,700

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

Multiple Choice

• $52,000

• $18,500

• $64,375

• $27,375