The Following Information Pertains to the January Operating Budget for Casey

Multiple Choice

The following information pertains to the January operating budget for Casey Corporation.
-Budgeted sales for January $203,000 and February $101,000.
-Collections for sales are 60% in the month of sale and 40% the next month.
-Gross margin is 25% of sales.
-Administrative costs are $20,000 each month.
-Beginning accounts receivable is $28,000.
-Beginning inventory is $19,000.
-Beginning accounts payable is $75,000. (All from inventory purchases.)
-Purchases are paid in full the following month.
-Desired ending inventory is 20% of next month's cost of goods sold (COGS) .
For January, budgeted net income is ________.

A) $50,750
B) $30,750
C) $101,800
D) $61,200