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Cape Lumber sells lumber and general building supplies to building contractors in a medium-sized town...

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Accounting

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Cape Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $350,000 for December, and $370,000 for January Collections are expected to be 55% in the month of sale, 44% in the month following the sale, and 1% uncollectible. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory equal to 60% 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 $21,100. . Monthly depreciation is $19,000. Ignore taxes. The net income for December would be: $66,400 $43,900 $47,400 $61,500

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