Diltex Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: -Sales are budgeted at $220,000 for November, $200,000 for December, and $210,000 for January. -Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible. -The cost of goods sold is 65% of sales -The company desires to have an ending merchandise inventory at the end of each month equal to 50% 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 $19,000 -Ignore taxes. Statement of financial position (October 31) Assets Cash $16,000 Accounts receivable (net of allowance for uncollectible accounts) $76,000 Merchandise inventory $71,500 Property, plant and equipment (net of $536,000 accumulated depreciation) $956,000 Total assets $1,119,500 Liabilities and Stockholder's equity Accounts payable $147,000 Common stock $840,000 Retained earnings $132,500 Total liabilities and stockholder's equity $1,119,500 1. Expected cash collections in December are: a. $59,400 b. $140,000 c. $199,400 d. $200,000 2. The cost of December merchandise purchases would be: a. $133,250 b. $68,250 c. $130,000 d. $143,000 3. December cash disbursements for merchandise purchases would be: a. $136,500 b. $68,250 c. $133,250 d. $130,000 4. The difference between cash receipts and cash disbursements for December would be: a. $17,900 b. $22,500 c. $40,400 d. $62,900 5. The cash balance at the end of December would be: a. $116,900 b. $16,000 c. $100,900 d. $56,400