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

• Sales are budgeted at $248,000 for November, $288,000 for December, and $220,000 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 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 $17,500.
• Monthly depreciation is $20,000.
• Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$ 20,000
Accounts receivable	79,500
Merchandise inventory	130,200
Property, plant and equipment, net of $624,000 accumulated depreciation	976,000
Total assets	$ 1,205,700
Liabilities and Stockholders' Equity
Accounts payable	$ 244,000
Common stock	745,000
Retained earnings	216,700
Total liabilities and stockholders' equity	$ 1,205,700

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

Multiple Choice

• $88,000

• $33,000

• $27,500

• $47,500