Diltex Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $310,000 for November, $290,000 for December, and $300,000 for January. Collections are expected to be 68% in the month of sale, 30% in the month following the sale, and 2% uncollectible. The cost of goods sold is 60% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 60% 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 $27,000. Monthly depreciation is $18,000. Ignore taxes.

Statement of Financial Position October 31
Assets
Cash	$20,000
Accounts receivable (net of allowance for uncollectible accounts)	80,000
Merchandise inventory	111,600
Property, plant and equipment (net of $545,000 accumulated depreciation)	965,000
Total assets	$1,176,600

Liabilities and Stockholder' Equity
Accounts payable	$133,000
Common stock	910,000
Retained earnings	133,600
Total liabilities and stockholder' equity	$1,176,600

The cost of December merchandise purchases would be:

$108,000

$178,800

$177,600

$174,000