q 149 step by step

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: o Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. o Collections are expected to be 90% in the month of sale, 8% in the month following the sale, and 2% uncollectible. o The cost of goods sold is 75% of sales. o The company purchases 60% of its merchandise in the month prior to the month of sale and 40% in the month of sale. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $24,700. o Monthly depreciation is $16,000. o Ignore taxes. $ Statement of Financial Position October 31 Assets: Cash............ Accounts receivable (net of allowance for uncollectible accounts). Inventory.... Property, plant and equipment (net of $502,000 accumulated depreciation)....... Total assets 19,000 77,000 157,500 1,002,000 $1,255,500 Liabilities and Stockholders' Equity: Accounts payable .... Common stock ..... Retained earnings Total liabilities and stockholders' equity...... $ 272,000 780,000 203,500 $1,255,500 148.The net income for December would be: A. $32,900 B. $42.300 C. $39.300 D. $55,300 149. The cash balance at the end of December would be: A. $19,000 B. $156,600 C. $61,300 D. $137,600