Rainbow, Inc. began operations on January 1 of the current year with a $12,000 cash balance. Forty percent of sales are collected in the month of sale; 60% are collected in the month following sale. Similarly, 20% of purchases are paid in the month of purchase, and 80% are paid in the month following purchase. The following data apply to January and February: Sales Purchases Operating expenses January $35,000 30,000 7,000 February $55,000 40,000 9,000 If operating expenses are paid in the month incurred and include monthly depreciation charges of $2,500, determine the change in Rainbow's cash balance during February. 0 $2,000 increase O $5,000 increase $4,500 increase $10,000 increase $7,500 increase O $16,500 increase O None of the answers listed is correct