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:

A. $137,500
B. $42,500
C. $107,500
D. $77,500


Answer: B

Business

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