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: Multiple Choice
$107,500
$137,500
$42,500
$77,500