The Banderas Company, 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. Budgeted depreciation for December is $35,000. 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. The planned merchandise inventory on December 31 is $270,000. The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid for in cash

The budgeted net income for December is:

Question 36 options:

1)

$42,500.

2)

$77,500.

3)

$107,500.

4)

$137,500.