Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:
$\bullet$ Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January.
$\bullet$ Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible.
$\bullet$ The cost of goods sold is 70% of sales.
$\bullet$ The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase.
$\bullet$ Other monthly expenses to be paid in cash are $24,600.
$\bullet$ Monthly depreciation is $17,000.
$\bullet$ Ignore taxes.
-The net income for December would be:

Question

Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:
$\bullet$ Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January.
$\bullet$ Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible.
$\bullet$ The cost of goods sold is 70% of sales.
$\bullet$ The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase.
$\bullet$ Other monthly expenses to be paid in cash are $24,600.
$\bullet$ Monthly depreciation is $17,000.
$\bullet$ Ignore taxes. 
-The net income for December would be:

Quizplus · Accepted Answer

Net income = Sales - Cost of goods sold - Operating expenses= $120,000 - $40,800 - $20,000= $59,200

Carner Lumber Sells Lumber and General Building Supplies to Building ∙\bullet∙

Carner Lumber Sells Lumber and General Building Supplies to Building $\bullet$