TB MC Qu. 8-119 Bramble Corporation is a small wholesaler ...

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $410,000 for November, $390,000 for December, and $380,000 for January.
• Collections are expected to be 50% in the month of sale and 50% in the month following the sale.
• 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 $24,700.
• Monthly depreciation is $15,700.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	20,700
Accounts receivable		70,700
Merchandise inventory		229,600
Property, plant and equipment, net of $572,700 accumulated depreciation		1,094,700
Total assets	$	1,415,700
Liabilities and Stockholders' Equity
Accounts payable	$	254,700
Common stock		820,700
Retained earnings		340,300
Total liabilities and stockholders' equity	$	1,415,700

The cost of December merchandise purchases would be:

Multiple Choice

• $312,000

• $306,400

• $212,800

• $328,000