The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:

• Sales at $550,000, all for cash.

• Merchandise inventory on November 30 was $300,000.

• The cash balance at December 1 was $25,000.

• Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash.

• Budgeted depreciation for December is $35,000.

• The planned merchandise inventory on December 31 is $270,000.

• The cost of goods sold is 75% of the sales price.

• All purchases are paid for in cash.

• There is no interest expense or income tax expense.

The budgeted net income for December is:

		$42,500
		$107,500
		$137,500
		$77,500