Sales are budgeted at $290,000 for November, $310,000 for December, and S210,000 for January Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise Inventory at the end of each month equal to 70% 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 $21,100. Monthly depreciation is $21,000. Ignore taxes Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory property, plant and equipment, net of $624,000 accumulated depreciation Total assets 25,000 77,000 162.400 1,026,000 $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity 239.000 740,000 311,400 1,290,400 5 (15) Expected cash collections in December are: $310,000 $101.500 $300,000 BM The cost of December merchandise purchases would be: $248,000 $232,000 $117,600 $192,000 The net income for December would be: O $19,900 O $38,700 O $40,900 O $13,700 Retained earnings at the end of December would be: $325,100 O $311,400 $353,400 $347,200