The Last Option is $42,500

The Bandeiras Company, a merchandising firm, has budgeted its activity for December according to the following information: 1. Sales at $550,000, all for cash. II. Merchandise inventory on November 30 was $300,000. III. Budgeted depreciation for December is $35,000. IV. The cash balance at December 1 was $25,000. V. Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash. VI. The planned merchandise inventory on December 31 is $270,000. VII. The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid for in cash. What is the budgeted net income for December? Multiple Choice $77,500 $107,500 $137,500