Sales are budgeted at $440,000 for November, $460,000 for December, and $460,000 for January.

Collections are expected to be 85% in the month of sale, 14% in the month following the sale, and 1% uncollectible.

The cost of goods sold is 80% of sales.

The company would like to maintain ending merchandise inventories 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 $22,800.

Monthly depreciation is $20,000.

Ignore taxes.

Balance Sheet October 31

Assets

Cash $38,000

Accounts receivable, net of allowance for uncollectible accounts 86,000

Merchandise inventory 246,400

Property, plant and equipment, net of $614,000

accumulated depreciation 1,220,000

Total assets $1,590,400

Liabilities and Stockholders' Equity

Accounts payable $285,650

Common stock 940,000

Retained earnings 364,750

Total liabilities and stockholders' equity $1,590,400

December cash disbursements for merchandise purchases would be: $368,000 $340,800 $257,600 $363,200