Question 7(1 point)

Reference: 09-13

The Bandeiras Company, a merchandising firm, has budgeted its activity for December according to the following information:

I. Sales at $550,000, all for cash.

II. Merchandise inventory on November 30 was $300,000.

III. Budgeted depreciation for December is $35,000.

IV. The cash balance at December 1 was $25,000.

V. Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash.

VI. The planned merchandise inventory on December 31 is $270,000.

VII. The invoice cost for merchandise purchases represents 75% of the sales price. All purchases

are paid for in cash.

What is the budgeted net income for December?

Question 7 options:

A)

$137,500.

B)

$107,500.

C)

$77,500.

D)

$42,500.