Morgan Company's budgeted income statement reflects the following amounts:

SalesPurchasesExpensesJanuary$114,000 $72,000 $23,400 February 104,000 60,000 23,600 March 119,000 75,250 26,400 April 124,000 78,500 28,000

Sales are collected 50% in the month of sale, 25% in the month following sale, and 24% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Morgan pays for all purchases in the month following purchase and takes advantage of a 2% discount. The following balances are as of January 1:

Cash$82,000 Accounts receivable^* 52,000 Accounts payable 66,000

^*Of this balance, $26,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $4,400 of depreciation. The expenses are paid in the month incurred. Morgans expected cash balance at the end of January is:

Multiple Choice

$81,320.

$82,200.

$76,920.

$86,600.

$100,320.