Rainbow, Inc. began operations on January $1$ of the current year with a $$12,800$ cash balance. Fifty percent of sales are collected in the month of sale; $50\%$ are collected in the month following sale. Similarly, $10\%$ of purchases are paid in the month of purchase, and $90\%$ are paid in the month following purchase. The following data apply to January and February:

January February

Sales $ $43,000$ $ $63,000$

Purchases $34,00048,000$

Operating expenses $7,8009,800$

If operating expenses are paid in the month incurred and include monthly depreciation charges of $$3,300,$ determine the change in Rainbow$$s cash balance during February.

Multiple Choice

$$7,800$ increase.

$$11,100$ increase.

$$16,900$ increase.

$$20,200$ increase.

None of the answers is correct.