TB MC Qu. 8-128 Dilly Farm Supply is located in a small ...

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

• Sales are budgeted at $308,000 for November, $328,000 for December, and $228,000 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 $22,900.
• Monthly depreciation is $30,000.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	35,500
Accounts receivable		86,000
Merchandise inventory		172,480
Property, plant and equipment, net of $624,000 accumulated depreciation		923,000
Total assets	$	1,216,980
Liabilities and Stockholders' Equity
Accounts payable	$	257,000
Common stock		758,000
Retained earnings		201,980
Total liabilities and stockholders' equity	$	1,216,980

Accounts payable at the end of December would be: