Problem 10-49 Budgeting for a Merchandising Firm LO 10-4] Goldberg Company is a retail sporting goods store that uses an accrual its operations follow accounting system. Facts regarding Sales are budgeted at $230,000 for December and $200,000 for January, terms 1/eom, n/6o. Collections are expected to be 50% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible and recorded in an allowance account at the end of the month of sales. Bad debts expense is included as part of operating expenses. Gross margin is 30% of sales. All accounts receivable are from credit sales. Bad debts are written off against the allowance account at the end of the month following the month of sale. Goldberg desires to have 80% of the merchandise for the following month's sales on hand at the end of each month. Payment for merchandise is made in the month following the month of purchase. .Sales are . .Other monthly operating expenses to be paid in cash total $18,400. : Annual depreciation is $168,000, one-twelfth of which is reflected as part of monthly operating expenses Goldberg Company's statement of financial position at the close of business on November 30 follows GOLDBERG COMPANY Statement of Financial Position November 30, 2016 Assets Cash Accounts receivable (net of $4,000 allowance for doubtful accounts) Inventory Property, plant, and equipment (net of $580,000 accumulated depreciation) $ 18,000 56,000 128,800 960,000 Total assets $1,162,800 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 138,000 800,000 224,800 Total liabilities and equity $1,162,800