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 Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets Liabilities and stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $239,000740,000311,400$1,290,400 The net income for December would be: Multiple Choice $19,900 $38,700 $40,900 $13,700