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    Budgeted Net Income

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    Question 1:

    The Bandeiras Company, a merchandising firm, has budgeted its activity for December according to the following information:

    - Sales at $560,000, all for cash.
    - Merchandise inventory on November 30 was $304,000.
    - Budgeted depreciation for December is $34,000.
    - The cash balance at December 1 was $24,000.
    - Selling and administrative expenses are budgeted at $57,000 for December and are paid in cash.
    - The planned merchandise inventory on December 31 is $277,000.
    - The invoice cost for merchandise purchases represents 70% of the sales price. All purchases are paid for
    in cash.

    The budgeted net income for December is:





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    Solution shows calculations of Budgeted Net Income for Bandeiras Company