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

1) Expected cash collections in December are:

A) $310,000

B) $101,500

C) $303,000

D) $201,500

2) The cost of December merchandise purchases would be:

A) $248,000

B) $232,000

C) $117,600

D) $192,000

3) December cash disbursements for merchandise purchases would be:

A) $192,000

B) $243,200

C) $117,600

D) $248,000

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

A) $46,600

B) $19,200

C) $13,700

D) $38,700

5) The net income for December would be:

A) $19,900

B) $38,700

C) $40,900

D) $13,700

6) The cash balance at the end of December would be:

A) $69,100

B) $25,000

C) $57,900

D) $38,300

7) Accounts payable at the end of December would be:

A) $192,000

B) $248,000

C) $117,600

D) $74,400