The Adams Corporation, a Merchandising Firm, Has Budgeted Its Activity

Multiple Choice

The Adams Corporation, a merchandising firm, has budgeted its activity for November according to the following information: • Sales at $450,000, all for cash.
• Merchandise inventory on October 31 was $200,000.
• The cash balance November 1 was $18,000.
• Selling and administrative expenses are budgeted at $60,000 for November and are paid for in cash.
• Budgeted depreciation for November is $25,000.
• The planned merchandise inventory on November 30 is $230,000.
• The cost of goods sold is 70% of the selling price.
• All purchases are paid for in cash.
• There is no interest expense or income tax expense.
The budgeted net income for November is:

A) $50,000
B) $68,000
C) $75,000
D) $135,000