Burning Lotus, Inc., a merchandiser of earth centric products, began operations on January 1. The company expects sales in its first month of operations to total $15,000. All sales will be cash sales. Inventory purchases during January are expected to equal $4,500. Purchases are paid for in the month following the month of purchase. No purchase discounts are available. The company's expected operating expenses are as follows: Salaries and Wages (paid on the last day of each month) Lease Expense (paid on the 15th day of each month) Utilities Expense (paid on the 1st day of the following month) Depreciation Expense $2,500 per month $1,000 per month $750 per month $500 per month Burning Lotus plans to take out a business loan with a local bank at the beginning of January. The entire amount borrowed will be immediately reinvested in the business to purchase assets and inventory. Interest will not begin to accrue until February; however, Burning Lotus is required to make a principal payment of $2,000 at the end of January. Additionally, the company plans to pay a cash dividend of $3,000 to its owners in January. Burning Lotus is required to maintain a minimum cash balance of $7,000 at the end of each month by the bank. Which of the following statement is incorrect? A. Burning Lotus's expected ending cash balance on January 31st is $6,500. B. Burning Lotus would not budget to make a payment in January to its suppliers for inventory purchases. C. Burning Lotus's cash operating expenses paid in January equal $4,750. D. Burning Lotus could pay up to $2,500 in cash dividends to its owner during January without dipping below the required minimum cash balance. E. Burning Lotus should anticipate having to pull $500 from an established line of credit if it makes no changes to the above plan. O