Question

Carver 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 $368.000 for November. $338,000 for December, and $318.000 for January • Collections are expected to be 90% in the month of sale and 10% in the month following the sale. • The cost of goods sold is 75% of sales • The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purcha . Other monthly expenses to be paid in cash are $26.500. . Monthly depreciation is $19.600 . Ignore taxes Balance Sheet October 31 Assets Cash $ 24,400 Accounts receivable 80,600 Inventory 165,600 Property, plant and equipment, net of $511,000 accumulated depreciation 1,020.000 Total assets $1,200,600 Liabilities and Stockholders' Equity Accounts payable $ 281,000 Common stock 798,000 Retained earnings 211.600 Total liabilities and stockholders' equity 51,290.600 The net income for December would be

Answer 1

	net income for December
	Sale				338,000
	less cost of goods sold				253500
	gross profit				84500
	operating expenses
	other expenses				26,500
	depreciation				19,600
	net income				38,400