Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $297,000 for November, $317,000 for December, and $217,000 for January Collections are expected to be 70% in the month of sale and 30% 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 80% 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 $21,800. Monthly depreciation is $24,500. Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets $ 28,500 80,500 178, 200 1,011, 000 $1,298, 200 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 243,000 747,000 308,200 $1,298, 200 The cost of December merchandise purchases would be: The cost of December merchandise purchases would be: Multiple Choice $177,750 o O $130,200 O $222,750 $237,750