- Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for operations follow: ated in a small town in the rural west. Data regarding the stores January Collections are expected to be 55% in the month of sale, 40% in the month following the sale, and 5% uncollectible. The cost of goods sold is 80% of sales. The company purchases 50% of its merchandise in the month prior to the month of sale and 50% in the month of sale. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,700. Monthly depreciation is $17.000. Ignore taxes. $ 28.000 Statement of Financial Position October 31 Assets: Cash. Accounts receivable (net of allowance for uncollectible accounts) Inventory Property, plant and equipment (net of $640.000 accumulated depreciation). Total assets. 78.000 104.000 1.132.000 $1.342.000 Liabilities and Stockholders' Equity: Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 200.000 800.000 342.000 $1.342.000 2. Expected cash collections in December are: A. $126,500 B. $230,500 C. $104,000 D. $230,000 3. The cost of December merchandise purchases would be: A. $176,000 B. $208,000 C. $184,000 D. $84,000 4. December cash disbursements for merchandise purchases would be: A. $184,000 B. $196,000 C. $176,000 D. $84.000 5. The excess (deficiency) of cash available over disbursements for December would be: A. $12,800 B. $8,600 C. $17,000 D. $4,200 6. The net income (loss) for December would be: A. $24,300 B. $12,800 C. ($4,200) D. $7,300 7. The cash balance at the end of December would be: A. $40,100 B. $28,000 C. $12,100 D. $40,800 8. The accounts receivable balance, net of uncollectible accounts, at the end of December would be: A. $89,500 B. $92,000 C. $103,500 D. $196,000 9. Accounts payable at the end of December would be: A. $84,000 B. $92,000 C. $184,000 D. $176,000 10. Retained earnings at the end of December would be: A. $342,000 B. $362,600 C. $337,800 D. $338,100