Question - Master budget Adams Company, a merchandising firm that sells one product, estimates it will sell 12,000 units of its product at $60 per unit in December. In November, the company prepared other information to prepare a budget for December, as shown here:

Merchandise inventory, December 1                                               2,000 units

Desired merchandise inventory for December 31                             3,000 units

Cost per unit of merchandise purchases                                          $40

Selling and administrative expenses                                               $200,000

Cash balance, December 1                                                            $30,000

November sales                                                                            $600,000

• The company estimates that 60% of each month's sales are collected in the month of sale and that the remaining 40% is collected in the month after sale.
• The $200,000 of selling and administrative expenses includes $40,000 of depreciation.
• The company pays for half of merchandise purchases during the month of purchase and pays the remainder during the month following purchase. Estimated merchandise purchases for November are $340,000.
• All other out-of-pocket expenses are paid for in cash.

Required: Prepare a budgeted income statement for the month ended December for Adams Company.